Sigby, a Seattle startup that lists and coordinates the booking of kids' classes and camps, today raised $1.2 million from a handful of venture capitalists and angel investors.

Sigby will use the funds to expand its presence in the Puget Sound region and prepare to expand to additional markets. The company was formed early in 2012 and now has eight employees, working at 1000 Second Ave.

"For exasperated parents, there's no other place like Sigby," Loretta Little, managing director of WRF Capital, said in a release. "It truly is a one-stop site that is so convenient. We see the great opportunity, and we look forward to helping Sigby continue to innovate and expand its reach to parents everywhere."

Founder Katie Thompson previously was a venture capitalist at Trilogy. She was motivated to start the company by her own experience scheduling programs for her two kids -- which required a mess of paperwork and logistics.

"The more parents and program providers I spoke with, I realized that this was a big problem that needed to be solved. Parents and program providers deserve better," she said in the release.

Sigby is emerging with its funding just as well-organized parents are starting to think about activities during spring and summer vacations.

The company may partly fill a void left by the closure of TeachStreet, a Seattle startup that ran from 2007 until its team was absorbed by Amazon.com in 2012. TeachStreet offered class listings of all kinds -- not just kids -- and eventually became a profitable, multi-state operation after raising more than $3 million from investors.

Putting its buckets of venture capital to use, Seattle's SEOmoz bought another small Portland company to round out its portfolio of online marketing tools.

SEOmoz is announcing today that it paid $3 million in cash and stock for GetListed.org, a two-person Portland company that's helped more than 2 million small businesses build their online presence since it started in 2009.

GetListed founders David Mihm and Chris Tanger will stay with SEOmoz but work remotely from Portland and Chicago. Mihm is an employee and Tanger is contracting with SEOmoz.

"GetListed puts power in the hands of local businesses - they make data essential to inbound marketing channels easily accessible," SEOmoz Chief Executive Rand Fishkin said in a release. "We're absolutely thrilled to fight the menace of data obfuscation at their side."

The cool kids in Silicon Valley usually get all the attention. But the tables are turning, now that it's getting harder to make a killing with a clever app or website.

Lately, the Valley's been fretting about a slowdown in venture funding for consumer Web companies.

Venture capitalist Fred Wilson opined last week that the consumer Web has finally matured and the big players like Google, Facebook, Amazon.com, Microsoft and others are "starting to suck up a lot of the oxygen.'

In a blog post, Wilson wrote that "consumer behaviors are starting to ossify on the Web, and it is harder than ever to build a large audience from a standing start."

Meanwhile, Seattle has been steadily growing a promising crop of business-oriented startups with half the glamour and perhaps twice the promise.

These companies don't get the buzz of the Valley's groovy consumer startups. But those that survived the recession and steadily built strong businesses are moving into position for big breakouts over the next year or two.

The backdrop for this is the emergence of Seattle as the world leader in cloud computing. Tech ventures small and large are building the infrastructure, tools and services that are modernizing the business world and managing the massive amounts of data that's being generated.

That environment is drawing talent and investors now that enterprise software is back in favor. Evidence of this came in a surge of financing deals over the past month as a handful of tech startups in the area raised collectively more than $100 million.

"We're going to look back 10 years from now, and we're not going to believe how successful the Pacific Northwest has been in terms of growing great businesses," Matt McIlwain, managing director at Madrona Venture Partners in Seattle, told me last week.

Here's a look at some of the area companies moving into pole positions:

Big Fish Games: The steady Seattle casual-games giant is hunkering down and investing heavily in new businesses, which could position the company to go public or be acquired within two years.

Big Fish just named Dave Stephenson (below right, in a photo by Times photographer Ken Lambert) its president, freeing up founder and Chief Executive Paul Thelen (left) to focus on its new initiatives.

Stephenson formerly led finance operations for the biggest group at Amazon.com, its North American retail business. He joined Big Fish as chief financial officer last year.

Big Fish produces and publishes hundreds of games a year and distributes them on multiple platforms. Its games may not be household names, but they're good enough to draw a huge, paying audience. That provides more consistent growth than chasing big hits.

Sales grew 30 percent last year and this year will exceed $200 million. Its global head count is about 700, including 550 in Seattle, where it added nearly 100 employees over the past year.

Big Fish considered going public last year but held off because it was planning big investments in its new cloud gaming platform. Thelen said the investments will lead to "hypergrowth" but wouldn't have gone over well on Wall Street.

"We saw a lot of opportunity to emerge as a much bigger company through this forward investing in these new businesses we're pursuing now," he said.

Big Fish plans to spend perhaps 18 to 24 months getting the new ventures up to speed. They include the expansion of its cloud gaming platform, new "free to play" games supported by microtransactions and expansion in Asia.

"When we emerge is the time we'd consider an acquisition or an IPO, but right now we're in a build phase," Thelen said.

Smartsheet: Bellevue-based Smartsheet is announcing Monday that it has raised $26 million to accelerate its business providing online spreadsheets. The funding came from Madrona and Insight Venture Partners.

More than 20,000 organizations are now using Smartsheet's online service to collaborate and share information.

Chief Executive Mark Mader expects his team will grow from 40 to 140 over the next 18 months. Smartsheet is cash-flow positive and saw triple-digit sales growth over the last three years.

"The opportunity we see here, it's substantial," he said.

Mader wouldn't say much about plans to go public or be sold. But he acknowledged that large software vendors are interested in adding new products that are used by workers at every level of a company.

Those companies have to innovate "or find technologies that have huge reach and touch users within business."

The amount of data that companies need to store will grow 50 times by 2020, yet corporate IT budgets and staffing are expected to grow only about 50 percent over that period, Qumulo Chief Executive Peter Godman said.

"That situation -- this massive increase in data and a fairly modest increase in resources -- requires fundamentally better and more efficient technologies," he said.

Qumulo is a fourth-generation Seattle tech company. Godman came from Isilon, a data-storage company started by veterans of RealNetworks, which was started by a Microsoft alum.

Isilon was sold to EMC for $2.25 billion in 2010.

At last week's state Innovation Summit, the president of EMC's Isilon group said the business has expanded from 500 to 1,300, and sales have more than tripled since the acquisition.

Qumulo is keeping its product plans under wraps until next year, but in the meantime it's using its newfound capital to hire like mad. Godman expects head count to grow from 18 to 68 over the next 18 months.

People - and Washington's ability to attract them - are why the state has become a world leader in information-technology over the last 30 years.

"For the most part our success story is in many ways a story that has been built on being a magnet for attracting people to come to Washington state from across the country and around the world," Microsoft General Counsel Brad Smith said at the Washington Innovation Summit in Seattle today.

Continuing to compete for talent "will dictate whether our region can prosper on a long term basis," Smith said.

During his opening keynote speech at summit, Smith argued for a greater emphasis on computer science education, including new standards requiring the subject for high school graduation.

"The number one thing we need to think about is the competition for talent," Smith said.

Smith set the tone for the summit, at which government, business and education leaders are gathering at the Bell Harbor conference center to discuss ways to nurture innovative industries in the state. It's sponsored by the Technology Alliance.

Incoming Gov. Jay Inslee is scheduled to address the group later in the day. He may echo some of the themes discussed by Smith, who is advising Inslee on his transition.

Smith said the state has a great foundation to build upon, including institutions such as the University of Washington.

"Now is the time for us to raise our sights and aim higher," he said.

Smith was followed by Ed Lazowska, Bill & Melinda Gates Chair in Computer Science & Engineering at the UW.

Lazowska provided an overview of "big data" and opportunities around the rapidly advancing ability to manage and quickly analyze massive amounts of data being generated nowadays. This flood of data and computing challenges are transforming businesses and spawning new software companies.

A related trend is the rise of cloud computing. With Microsoft, Amazon.com and Google developing their cloud services here, "the Seattle area is really kind of the owner of the cloud," Lazowska said.

"It's a good time to be in Seattle and a good time to be doing big data," he added.

Myhrvold, a founding partner of Bellevue's Ignition Partners, said big data opportunities have just started.

"I think big data is going to give us a 15-year investment horizon ... and we're in year three today," he said.

Meanwhile companies in the field are growing like crazy.

Chabot said Tableau has grown from 350 to 720 employees this year. The company is in the "sweet spot of high-tech company growth."

Splunk is based in San Francisco but opened a Seattle engineering office with around 30 people, Myhrvold said. Fridgen said Decide has about 30 employees.

Google is continuing to expand in the area. It employs around 1,000 in the Seattle area including 600 in Kirkland and 400 in Seattle, Ortega said.

Ortega said the majority of Google's cloud efforts are coming from engineers in the Seattle area, which is developing into a "critical cluster" of cloud computing expertise.

Chabot said it's a tragedy that so many of the world's smartest engineers have spent the last decade working on how to get people to click ads or put more things in digital shopping carts. Now the technologies that they advanced are being applied in other areas.

"Every single industry you can name is doing really pioneering things with big data collections to improve the world," he said, adding that:

"I think getting out of this click on an ad/shopping cart rut we've been in for the last 10 years ... it's going to create a huge wave of job creation."

Teams of participants developed startup companies in a 54-hour burst then pitched them to a panel of judges Sunday evening. Zillow hosted the event at its swanky offices downtown.

The winning team gets to enter a video pitch in a national competition and all the teams get exposure and experience. There were also restaurant gift certificates and other goodies for the top teams.

Sunday's winner was Corki, a mobile phone app that suggests a wine after you scan a restaurant's wine list. You can also use the app to add preferences, shop for wine online and find nearby places to drink wine.

Second place went to InstaCal, a one-click button for adding online events to your electronic calendars. The cloud-hosted service includes a console for event organizers to manage calendar notifications.

Third place went to Travel Angel, a marketplace for connecting with travel experts around the world, who charge for brief Skype sessions to share information and their expertise about your travel destinations.

I was one of the judges. I'd add a consolation prize for the pitching skills of Car Hero, a game that installs on the steering wheel to let drivers tap out a rhythm game or sound effects with their thumbs. It was the first hardware prototype generated at the event.

First it legalizes marijuana. Next it's likely to become the hub for online gambling.

The city's already on the forefront of online casinos, with Seattle companies building some of the leading virtual-gambling operations on Facebook and mobile devices such as Apple's iPad and iPhones.

For now they're using virtual chips -- not real money. But the federal government may legalize online gambling within the next year or two as a way to boost tax revenue.

An early sign of this gold rush came in January, when Las Vegas gambling giant International Game Technology (IGT) bought Seattle video-game company DoubleDown Interactive in a deal worth up to $500 million.

IGT paid $250 million in cash and promised another $250 million if revenue and retention goals were met.

IGT's primary business is making actual slot machines and other gaming systems used in casinos. Last week IGT finally revealed in its quarterly earnings report what a good bet it placed.

DoubleDown helped IGT grow its revenue from interactive games by 302 percent in the quarter and 293 percent in its fiscal year that ended Sept. 30, to $144 million.

DoubleDown operates one of the largest digital casinos. It had 5 million players per month on average during the quarter. On a daily basis, about 1.4 million played.

"They were leading when we got them and together we're moving even faster," IGT's chief financial officer, John Vandemore, said last week.

DoubleDown's growth suggests there's still good money to be made in the social-gaming business. It helped IGT blow past analyst expectations and its stock rose 5 percent the day after its earnings report. That's in contrast to social bellwethers Zynga and Facebook, which are struggling to gain investors' favor.

IGT's giving DoubleDown everything it needs to keep growing the operation in Seattle, according to DoubleDown Chief Executive Greg Enell, a veteran of Microsoft, Wild Tangent and Big Fish Games.

When I interviewed Enell last month in his office a few floors below Paul Allen's penthouse near CenturyLink Field, Enell employed 128 people. Now it's up to 147 and the company's moving this week into adjacent offices that will double its space.

"There really are no restrictions, any kind of hiring cap for us," he said. "We're building out as fast as we reasonably can, without sacrificing the quality of the people we hire."

DoubleDown started in 2010 with a handful of people in a little office on North Lake Union. Back then it was just another one of the dozens of small startups in Seattle trying to make a go building games.

The venture was more deliberate than a roll of the dice. Enell had previously sold another game company to Big Fish, then started a profitable online trivia-game company that provided funds to start DoubleDown.

"The idea was let's go build the biggest gambling-oriented audience online in the world. If we do that and online gambling legalizes, we're going to be really valuable," he recalled. "We saw a clear exit, and our exit happened a little sooner than I thought it would, but it did happen."

The team had expected legalization of online gambling to come between 2013 and 2015. Enell still thinks it could happen in the next year or two. But he's leaving that issue to the experts at IGT and staying focused on building virtual gambling games for Facebook and mobile devices.

IGT has a big library of slot-machine games that DoubleDown draws from to expand its online lineup. It adds about two games a month.

DoubleDown's also working to extend its global presence by localizing its games in different markets. It's also been building its own suite of tools to build browser-based games using HTML5 technology.

Meanwhile Enell's former employer, Big Fish, in August launched an online casino that's now making more money on Apple devices than DoubleDown.

But DoubleDown still has the lead on Facebook, where it's the fifth-highest grossing app, behind Zynga's Texas HoldEm Poker, FarmVille, ChefVille and FarmVille2.

Since this is all virtual currency, I'll make a bet of my own: The success that IGT's having with DoubleDown is going to draw other big gambling companies to Seattle, looking for expertise building online audiences and virtual games. Maybe a gambling company will finally put enough money on the table to buy Big Fish.

It's hard to predict the future, though. Just ask Enell's parents, who weren't enthused about his love of video games when he was growing up in Bellingham.

If there were a vote this week on which place has a better startup scene, Silicon Valley or Seattle, the Emerald City would win by a mile.

At least among voters who watch the new "reality" shows set in the West Coast tech hubs, which are debuting during the Bravo network's geek week.

On Monday, Bravo aired the first episode of "Start-Ups: Silicon Valley," which follows a handful of improbably attractive young startup wannabes.

Several come across as vapid, self-centered and repellent. Overall, what I saw of the show felt like a lame attempt to generate "buzz" and pander to a mid-20s demographic that's appealing to advertisers. It was produced by Randi Zuckerberg, sister of Facebook Chief Executive Mark Zuckerberg.

Things should improve Wednesday night with the 11 p.m. debut of "LOLwork," a Bravo series that follows life inside Cheezburger, the Seattle-based online humor network known mostly for putting funny captions on cute cat pictures.

The LOLworkers (pictured) are quirky, charming and engaging, which is good since they could come to be seen as the new face of Seattle's tech community.

Perhaps the show is more enjoyable and authentic-feeling because they're actually working for a living, at a real and profitable company that reaches 20 million people a month. Or because I watched the previews in Seattle.

"LOLwork" is so polished and funny at times that you wonder if the workers are flexing their humor muscles for the film crew, helping them produce a Seattle tech version of "The Office."

Bravo said the "30-minute doc-com" presents the world of Huh "and his eccentric staff as they attempt to make the world laugh five minutes a day by putting nimble yet grammatically incorrect captions on cute photos of domesticated pets and animals. The series begin as the staff at Cheezburger competes to create a new comedic web series for the site."

Huh said the show was "an amazing experience of a lifetime," but it's not exactly the reality he sees at work.

"It's a show -- it's a TV show. It's been edited," he said. "It's not what I see in the company, but it does capture the essence of what we do."

Huh said some of the things filmed that were really funny to him didn't make it onto the show, because the show was edited to tell a story and some things didn't quite fit.

Bravo paid Cheezburger for the opportunity. Huh wouldn't say how much, but said it was negligible.

"We didn't do it for the compensation," he said. "It wasn't actually very much. Basically we have a half an hour infomercial on Bravo."

Wasn't there a risk in letting people see how the sausage is made?

"I think we're much more attractive than sausages," Huh said. "I didn't really have that concern. ... We talked about what does it mean for our brand. What does it mean for our companies? What if we look like idiots?"

Cheezburger concluded that it would have to trust the producers to tell the company's story.

Huh said the company insisted on one rule, requiring Bravo to respect the consumers of Cheezburger's content. The rule was that "you can make fun of us. You can laugh at us. But you cannot make fun of users," he said.

Still, by drawing out humor in the daily grind of producing funny websites, Bravo may have missed what's really happening at Cheezburger.

The company has been steadily repositioning itself and changing its focus. It's transforming from a media company to a platform company, building tools that other companies can use to manage and distribute content.

There's a ceiling for growth for media, which isn't as scalable as a platform, Huh said. A platform can be used around the world, in places that might not get the humor that works so well for Cheezburger in the U.S.

Cheezburger also has had management changes that aren't reflected in the show. One of the business foils on the show, Chief Revenue Officer Todd Sawicki, left the company last month after filming was done.

"From top to bottom," Huh said, "this company's been going through a huge transformation."

Meanwhile, Bravo's team in Silicon Valley is trying to get funding for an app.

Here's a Seattle Times video of Huh offering tips on how to write good captions:

Gravel flies everywhere and the motor howls as an off-road racing car spins out of control on a rally course in the foothills east of Seattle.

The orange Subaru is more tricked out than usual, sporting an assortment of high-tech cameras stuck to the roof, fender, roll-cage and driver's helmet.

For the morning, this is a testing lab for a Seattle startup called Contour, which makes small, cylindrical cameras to capture and share action video.

The testing session at the DirtFish Rally School in Snoqualmie was unusual, but so is Contour.

Seattle has hundreds of startup companies, but it's rare to find one that's found national success developing hardware gadgets for consumers, a field that's dominated by companies in Silicon Valley.

"We're the redheaded stepchild in Seattle because we're doing hardware in a software town," said Marc Barros, Contour co-founder and chief executive.

(Barros is driving the car above and pictured below, in photos by Ken Lambert of the Times)

Contour is a homegrown venture. Barros and co-founder Jason Green worked on a University of Washington business-plan competition, where they won third place pitching an electronic rearview camera for motorcycles. Then they decided to make a helmet-mountable camera for skiers and others who wanted an easy way to film their adventures.

The business started as a sideline in Barros' parents' basement, backed by an uncle who cosigned a $50,000 loan. Their first break came when they showed a prototype to a distributor who said it would sell.

Barros, 31, grew up in Issaquah, the son of a Brazilian immigrant who came to Seattle to study and ended up at Boeing, and a mother who sold IBM systems. He played soccer at the UW and considered playing pro, but pursued a career in accounting instead, starting with an internship at Moss Adams.

"They about threw me out after the first two weeks because I was still doing the company on the side," he said. "I just couldn't do it. I couldn't sit in an office all day long and audit things."

Nine years later, Contour employs 55 people and is one of America's fastest-growing private companies, according to Inc. magazine. Last year Contour ranked seventh on the Inc. 500 list, after posting three-year sales growth of 11,663 percent. On this year's list it fell to 277th, with three-year growth of just 1,303 percent.

Contour just released its latest model, the $399 Contour+2, a 1080p camera with a big sliding switch that's easy to control with gloves on. It has a Bluetooth radio that lets you use an iPhone as a remote control and GPS to record the location and speed of the recorded action.

Even bigger for the business are new distribution deals with Apple and Best Buy that will help the company compete against its larger rival, San Mateo, Calif.-based GoPro.

Barros said the business evolved from making a camera to making one to capture action video. Along the way they figured out what they were really offering people.

"It eventually became 'make it easy to capture and share' and then we figured out why we exist, and then from that point forward it was a whole lot easier," he said.

Because Contour produces a specialty product, it's been easier to market than it would be if the company were selling a truly mass-market product.

"We target people that are online, that use their phones, that are social in nature and that are action-oriented," Barros said.

Skiers, surfers, skateboarders and mountain bikers are Contour's bread and butter, but Barros said the company also has sold its cameras to Navy SEALs. Military, police and security services could be markets that Contour pursues in the future.

"I think this could be a billion-dollar company if we go after multiple markets, but that could take us five, six, seven, eight years," he said.

"They exist; it's just not in the same volume as in the Bay Area,'' said Chris Massot, vice president at Synapse, a Seattle hardware-design company.

Synapse has grown to more than 200 employees designing prototypes and hardware for industrial, medical and consumer companies. For Nike, it worked on the SportBand and SportWatch GPS products that track pace, distance and calories for runners and walkers.

Massot said Seattle doesn't have an ecosystem of financiers and manufacturers familiar with consumer hardware, but there's still plenty of talent in the area.

"There's more than enough smart people and ideas in the Northwest to make this a very substantial hardware market, just like Southern California or Boston or other places where there's a lot of innovation and creativity," he said.

Still, the current wave of gadget mania feeding consumers' insatiable appetite for shiny new electronic toys has been mostly a Silicon Valley phenomenon.

Amazon.com chose to design its Kindle hardware at a subsidiary in San Francisco. Phone-maker HTC has its U.S. headquarters in Bellevue and a software studio in Seattle, but it bought a San Francisco design shop to work on its hardware.

Contour is straddling the divide. Its striking, rugged cameras are now designed in-house by a team in Seattle, where it's convenient for them to test new models on skis, bikes, boats or rally cars.

But Contour turned to Silicon Valley for specialized hardware-engineering talent. It now has a satellite office in Sunnyvale with about eight employees. That's also where it was able to hire an Apple veteran who is now Contour's chief operating officer.

Barros recently shifted day-to-day operational duties to the COO so he can spend more time on things like strategy, marketing and working with investors. But it's not clear whether he'll get much more time in the mountains with co-founder Green -- racing, skiing and "testing" with their cameras rolling.

"It starts with that," he said, "then you end up working all the time."

(Green is shown above, attaching a camera to a rally car. Below is a video Contour produced from its rally session at Dirtfish)

Meanwhile Seattle's biggest entrant in the current generation of Web startups has won over Wall Street in its first year as a public company.

The stock of online real-estate company Zillow has nearly doubled since it debuted at $20 last summer. Sales grew 75 percent last quarter to $28 million, employment has grown to 450 and most analysts following the company consider it a "buy."

A successful IPO is not as hard as it sounds if you take certain steps to prepare, according to Chief Executive Spencer Rascoff, who shared tips and the inside story last week over lunch with a group of Seattle entrepreneurs.

1. Get to scale with revenue. The rule of thumb is to be on track to book annual sales of $100 million. Zillow was approaching $60 million.

2. Be profitable. This may seem obvious, but some unprofitable companies have succeeded in going public. However "in this new IPO climate -- where so many growth companies have disappointed in the first couple of quarters of being public -- it's really, really important." Rascoff waited until Zillow was profitable.

3. Be on a path to become compliant with Sarbanes-Oxley's financial, or SOX, accounting and reporting regulations.

4. Be able to forecast results.

5. "Have a really good sense of the levers of your business."

"You have to be at the place where your company's mature enough that you know if 'I do X, then Y will happen; if I hire 20 more inside sales people, this is what will happen to our revenue,' " he said.

Zillow was started in 2005 but didn't really have a good handle on the levers of its business until a few years ago. Earlier on, it was still "experimenting so wildly across different aspects of the business."

Rascoff, 36, said that's been an issue for Groupon. It's still a young company experimenting with its business model, leading to its restating earnings after its IPO.

The same issue is affecting Facebook, which is now experimenting with mobile ads.

"One of the reasons they've had a bit of a rocky start has been because they're now learning all that -- understanding the levers of their business as they shift to mobile, under the scrutiny and glare of being a public company," he said.

At Zillow, "we wanted to wait until we had a good enough understanding of the levers of the business and therefore were able to forecast effectively."

The company benefited in part from the experience of its founders. Hailing from Expedia and Microsoft, they all had experience launching other companies. They could also afford to start the company with $6 million of their own money.

Perhaps that gives Zillow a different perspective.

Rascoff also shared a surprisingly positive view of the financial-disclosure rules affecting public companies.

Instead of complaining about the regulatory burden, Rascoff said he was glad to provide more information to help investors better understand Zillow.

The filings weren't that onerous and preparing them actually clarified Rascoff's understanding of his business, he said.

"A lot of the stuff that SOX requires is just good business management as well -- things like making sure you've got good internal controls, making sure that nobody can steal all your money and run off with it, and making sure you have proper accounting for things," he said.

Most refreshing of all, though, may have been Rascoff's candid take on the federal Jobs Act that became law in April.

Rascoff -- a former investment banker -- questioned the wisdom of the act allowing companies to prepare for their IPOs largely in secret, and then letting them disclose less details of their business to investors.

Rascoff expected that "there would be a stigma of companies not wanting to go this sketchy, somewhat quiet route" but so far that hasn't been the case.

Zillow probably wouldn't use the cloaking tools of the Jobs Act if it were going public now, Rascoff said.

"If it were us doing it right now, I think we would file the traditional way and not be on (the) confidential file because I like our story, I like our results," he said. "I would be happy to let everybody see that earlier and build excitement and interest in the story."

It's almost unheard of for a chief executive to embrace these regulations. That gorgeous view from on high must be having an effect on Rascoff.

Search marketing guru Rand Fishkin's annual MozCon tent revival began this morning at the Westin, where hundreds of marketers using Fishkin's tools are meeting this week.

Fishkin is co-founder and chief executive of SEOMoz, a 79-person company that develops tools and services for online marketers.

Although some may say SEO -- search-engine optimization -- is less important nowadays, Fishkin said the practice has evolved to include marketing across multiple online channels.

SEO itself continues to be important because Google and Bing continually change their formulas, requiring marketers to keep pace and adjust, he said.

"If Google stayed stagnant people would figure this stuff out and they have not."

Fishkin disclosed that he's switched to Bing as his default search engine at home.

"Bing is pretty good," he said, adding that for 80 percent of searches he can't tell the difference with Google. He especially likes integration of social networks.

Still, Microsoft has to improve that remaining 20 percent.

"They still have a long way to go ... until they get to this point of true parity and even surpassing Google in terms of relevancy they're going to have a really tough time," he said.

The proliferation of social networks and the complexity of marketing across these different channels is providing job security for the search marketing industry, Fishkin said.

Fishkin advised marketers to pay attention to the Google+ social network. He said he wouldn't be surprised if next year there will be as much discussion of Google+ optimization as there will be this year about optimization on other networks combined.

A big challenge that remains is sorting out which Web site visits lead to a purchase. The system now attributes the conversion to the last visit, even though a person may have come to a site multiple times from different sources before making that purchase.

At SEOmoz, for instance, purchasers on average visit the site seven to seven and a half times before converting to paid customers. They may read an SEOmoz tweet or see a Facebook post.

Twitter accounts for under 15 percent of the first time visitors to the site. But people almost never arrive directly from Twitter and proceed to making a purchase - the site gets credit for only 18 of 5,000 "last touch conversions" at the site.

Fishkin said SEOmoz is developing its own network infrastructure, to improve its services and cut the huge expense of using Amazon servers to power the business. The spent over $600,000 last month on Amazon Web Services.

SEOmoz can afford the project - it raised $18 million in March.

Fishkin also said he's starting a new blog, Moz.com/Rand, where he'll talk business and other topic, in addition to online marketing.

Appature's investors are doubling down on the Seattle marketing software startup.

Today, Appature is announcing that it raised $6.1 million from Ignition Partners and Madrona Venture group, building on the $3.5 million funding round they led in late 2009.

"Business has been scaling tremendously fast, and we need more capital to fuel that growth," Chief Executive Kabir Shahani said, adding that it has doubled the number of customers in the last seven months.

The company, which started in early 2007, has 47 employees and recently moved into larger offices near Pike Place Market. By year-end it should employ 60, he said.

Shahani said the additional funding will be used to "invest in innovation" and build up sales and marketing.

Appature offers companies a platform to run their sales and marketing operations. Shahani said his goal is for Appature to be known for sales and marketing in the same way that Salesforce.com is known for customer-relationship management and SAP is for enterprise finance operations.

As we prepare to celebrate America's independence and all the things that make this a great country, I have a suggestion that could calm anxieties about immigration that may color the big day.

I think people should have a cold beer or two and take in the scene in Bellevue.

Start with the big picture of a sleepy Seattle suburb that has morphed into a thriving, cosmopolitan hub of the tech industry.

Then zoom in to a smaller setting, like the monthly Startup on Tap events held by The Indus Entrepreneurs organization.

The group, known as TiE, began in Silicon Valley in 1993 as a networking and support group for South Asian immigrants starting tech companies.

A Seattle chapter was established in 2000, backed by early Microsoft employees wanting to mentor the next generation of Indian entrepreneurs.

Early on, these would-be entrepreneurs faced challenges. For instance, when it came time to raise venture capital, "the VCs may not have been too comfortable with their accent or whatever," recalls Vijay Vashee, a Microsoft veteran who founded the Seattle group.

"That's going back 20-plus years," he said. "Today if you go to Silicon Valley you'll find people of Indian origin are general partners in all these (VC) firms."

TiE helped things along by nurturing startups and getting them ready for funding deals. As those companies prospered, their founders became gurus to the next generation.

It worked almost too well. Entrepreneurs of Indian descent became so woven into the business community, the need for a group organized around race and ethnicity diminished. So the Seattle chapter reorganized and broadened its mission. It's moving beyond supporting a particular ethnic group to provide help to anyone starting a company.

Anyone looking for advice on their business plan is welcome to join, or just have a beer or a glass of wine at Startup on Tap and other events TiE holds around the region.

"The whole ecosystem has moved to a point here where it's not necessary to have the Indian focus now," Vashee said. "We can now take it to the next step."

Vashee -- one of the first Indians hired at Microsoft, back in 1982 -- said he became involved with TiE for several reasons. He wanted to mentor others of Indian origin, provide capital to their companies and integrate with mainstream America.

As these goals were realized, Vashee and other early TiE members cut back on their involvement in the group.

The last recession also took a toll, and membership fell below 100 as entrepreneurs turned to the profusion of startup networking and support groups that sprouted in the Seattle area as the economy picked up.

About a year and a half ago, TiE decided to reinvent itself. It diversified its board and more than doubled the number of "charter" members who underwrite the operations with $1,000 annual fees. Of the 45 charter members, five are now non-Indians and more are being sought. General membership is up around 50 percent to more than 160.

The group is also starting a formal angel investing program to back startups directly and involve people with non-tech companies.

"It's not that we're disowning our past or heritage. We're expanding and building on that," said chapter President Srivats Srinivasan, a Microsoft veteran who started digital-marketing company Nayamode in Redmond in 2005.

"We don't want this to just be an Indian thing," he added. "It's about fostering entrepreneurship in the community we live in."

Among the new charter members is Ivan Braiker, president of Hipcricket, a Kirkland mobile marketing and advertising company.

Braiker said he's struck by how many people of different ethnicities are starting companies. It makes him wonder if there's something wrong with our educational system that more nonimmigrants aren't showing the same entrepreneurial drive.

"A lot of young folks aren't focused in that direction. It's more entitlement than work," he said.

That's disappointing, he said.

"At least from my perspective of being the average white American sitting in there and saying yes, there's a lot of ethnicity here but there are not enough Caucasians in it," he said, asking, "Where are they, where are those young entrepreneurs?"

Perhaps they don't realize that at Startup on Tap, the first beer for members is on the house. The next round of mentoring and networking is at 5:30 p.m. July 10 at ViaVita Café in Bellevue.

Attracting the next generation is a familiar challenge for established groups, from TiE to Rotary to churches. Srinivasan said a recent focus has been to recruit younger charter members, such as American-born Kabir Shahani, 29, who co-founded Appature, a Seattle marketing software company.

"I'm really excited about what's possible and the organization evolving and the tremendous resources they have both here in Seattle and the Valley," Shahani said.

Moving beyond the ethnic focus isn't just a Seattle phenomenon for TiE. It's now a huge, international organization with a broader mission, and new chapters in places like Japan and Belgium are being started and led mostly by non-Indians, Vashee said.

It sounds like they're following the melting-pot formula that's been so successful in Seattle and Silicon Valley, and America at large.

"Here what we found is that whenever a startup is created, eventually the integration with the mainstream efforts is critical for the startup to succeed," Vashee said. "The sooner you get into that mood, the better off you're going to be."

Vashee has a unique perspective on these things.

He grew up in Zimbabwe and experienced resentment of Indians living and doing business on the African continent. This reached a crescendo when Idi Amin expelled them from Uganda in 1972. Some 15 years later, Vashee recalled, a new president of Uganda came to Seattle and met with people of Indian origin, asking them to return and help build up the country.

Vashee stayed on Mercer Island. Lately, he's been investing in medical-technology and energy companies along the West Coast and participating in local startup groups like the Alliance of Angels.

"I really think America needs more startups," he said. "The future jobs are not going to come from these big companies. They're driven by earnings per share and things like that; when it's time to fire they fire."

Vashee noted that 40 or 50 years ago there was no Microsoft, Apple, Intel, Google, Oracle or Facebook and those companies "today generate a huge part of the American economy. We need that."

Founder Ben Anderson formerly worked at Harborview, where he realized how inefficient whiteboards are for tracking and treating patients.

In 2008, he began developing the "Xylemed Whiteboard," a Web-based application that pulls patient information from hospital systems and displays it on PC screens and tablets.

"The information displayed is always as accurate as your medical record," he said.

It also works as a workflow automation tool and real-time communication tool, he said.

Since its debut at Harborview four years ago, the system has spread to more than 50 locations, including 44 departments at Harborview, six at the University of Washington Medical Center and one at the Seattle Cancer Care Alliance.

Anderson is aiming to extend the system to 2,200 hospitals. The plan is to charge about $50,000 to set up the system and then charge departments annual subscriptions of about $36,000.

Underlying technology is being licensed from the UW, since it was first developed at Harborview.

Anderson hopes to grow the company from three employees to 145 and reach $60 million in sales over the next five years. But first it needs to raise $800,000 in seed capital to start its sales and marketing efforts.

Next up is Maple Valley-based Food Chain Safety, providing an update to the group after a presentation two years ago.

The company markets microwave-assisted thermal sterilization technology to food companies.

Washington State University spent nine years working on the technology with military grants since a purpose was to develop improved "meals ready to eat."

Since 2010, the company has gone from having a single research prototype to two designs of commercial systems. It also has multiple approvals from the Food and Drug Administration and U.S. Department of Agriculture and initial customers. according to company president Kevin Petersen.

A prototype of the sterilization system received FDA approval in 2009. The company delivered its first system this month. It's working on a new commercial version of the system that it plans to begin delivering to customers in the first quarter of 2013.

Its first systems cost more than $650,000. The next generation will be leased.

The company has raised $2.35 million so far, including $1.85 million in upfront customer payments. It's now raising $2 million to cover the costs of patent legal fees, overseas market development and a new lab.

The company is developing a system uploaded by physical therapists, then downloaded at home by patients. The system shows how to perform the exercises and tracks their performance.

Some 65 percent of patients don't do their physical therapy exercises at home as
prescribed and 10 percent don't complete their treatment, which increases the chances of a relapse and additional medical costs, Chief Executive Alistair Hirst said.

There are 200,000 physical therapists, and the market is expected to grow 39 percent over the next decade, according to Hirst.

The company needs FDA approval before going to market. Then it plans to target private clinics and patients willing to pay out-of-pocket for improved care.

Therapists would pay $5 per patient for the system and patients would pay $25. Part of the company's revenue would be shared with Microsoft.

Hirst, a game-industry veteran who worked on "Need for Speed," sees an addressable market of about $2 billion.

So far the company has an alpha build of the system and has filed for a provisional patent. It's also working with Madigan Army Medical Center on a testing program, Hirst said. The company plans testing in the fall and a launch in early 2013.

Next up is Mobisante, a Redmond-based developer of mobile ultrasound systems that presented to the group two years ago. That led to the company finding an adviser and investors, Chief Executive Sailesh Chutani said.

Mobisante has since broken out. It's about to finalize its series A funding, it has received widespread press coverage and it launched its system in October. Its devices are being used in clinics in Washington and Tennessee and has had trials in India, the Phillippines and Sierra Leone.

The company produces ultrasound devices that work with smartphone hardware, making them more portable and inexpensive than traditional ultrasound machines.

In addition to the hardware, the company is setting up support services and a network of radiologists to work with people using the devices in the field.

Chutani, a Microsoft veteran, said the company should have $1 million in sales in its fiscal year and reach $20 million in annual sales in three years.

Next up is Back on Track, an online system hatched at the UW for tracking the progress of mental health patients.

Co-founder Corey Fagan has been involved with mental health programs at the school for 23 years as a pyschologist and administrator.

Fagan said progress tracking leads to better outcomes for patients, reduces provider errors and reduces the dropout rates of patients. It's so effective the federal government is offering incentives to providers who do outcome tracking and some states are mandating such tracking.

"Basically outcome tracking is trending," she said.

The company's system replaces paper-and-pencil questionnaires and proprietary computer programs.

Patients can use the company's Web-based system to do questionnaires from phones, PCs and other devices with browsers. Providers get instant feedback with graphics showing patients' progress over time and relative to norms.

The software is now being used at three clinics (not hospitals as I wrote initially), and is in beta testing at Children's Hospital.

The market includes more than 1 million providers, but the company also is pursuing the analytics market. Its growing collection of data, with personal details removed, can be marketed to researchers and others.

The company has raised $100,000 and is trying to raise $900,000 more. It plans to use the money in part to spin out of the UW and begin operating independently.

Closing the presentations is another medical-device venture hatched at the UW.

EchoGuide Medical is developing devices for surgeons to provide them with "GPS ability for their fingers."

The company is working on the problem of ventricular catheters for draining the brain that are placed by neurosurgeons in the wrong location 60 percent of the time, according to Chief Executive Tom Sanko.

In up to 10 percent of these cases there are complications, including paralysis and death, he said.

EchoGuide is developing an ultrasound-based device to navigate the placement of catheters. It's a handheld, battery-powered device that can be used in mobile settings, as well as operating rooms. It places an ultrasound transducer at the tip of the catheter.

The company estimates there are 188,000 of these procedures done yearly in the U.S., resulting in a potential market of $150 million a year.

Competitors include a less accurate mobile system and a large, costly system for operating rooms, Sanko said.

Target customers include neurosurgeons and trauma surgeons.

The company is eight months old. It received a $10,000 grant from the school last November.

This summer the company will begin testing on pig brains and with a special model of the human brain.

It plans to finish developing its technology next year and will begin developing products outside the school, with pilot manufacturing planned in late 2014. A final product could launch in late 2015.

EchoGuide expects to have sales of $58 million and profits of $31 million in 2019. But first it needs to raise $1 million this summer and fall. It also need to line up strategic partners.

Seattle health information startup Medify didn't take long to find its exit.

Medify is being acquired by Salt Lake City-based Alliance Health Networks, which operates more than 50 health-oriented social networks used by more than 1.5 million people. The companies are announcing the deal today but aren't disclosing terms of the sale.

Medify was formed in 2010 and last July launched a health information portal that compiles medical research. It raised $1.8 million from Voyager Capital and angel investors.

Alliance plans to keep the 10-person Medify team in Seattle and may expand the operation. Co-founders Derek Streat and Jay Bartot are becoming Alliance senior vice presidents.

Streat was an early executive at Classmates Online and co-founder of Adready and Bartot co-founded AdRelevance and Farecast, the travel site sold to Microsoft's Bing.

The truly inside story of starting the Xbox and Zune businesses at Microsoft was shared in a remarkable lecture Friday by Robbie Bach, the retired president of the company's entertainment and devices business.

Bach shared his unique perspective on why the Xbox was a success and the Zune was not during a presentation on intrapreneurship, or how to operate like a startup and launch new ventures within a large, existing business.

The lecture included advice for companies looking to foster entrepreneurial culture, and for all sorts of entrepreneurs entering competitive new markets. It was a breakfast event held by the Northwest Entrepreneur Network in South Lake Union.

Bach described the corporate retreats where the Xbox business was hatched and how Sony fumbled its lead and gave Microsoft the opportunity to get ahead in the console business.

"When the luck happens, you take advantage of it and run with it," he said.

It also helped that Bach's startup had $5 billion to $7 billion in funding available, he joked.

That wasn't enough to help the Zune, though. Bach admitted that Microsoft quickly realized it was too late to prevail in the portable media player business and in hindsight he would have built a music service rather than devices. Apple executed well and didn't give Microsoft the sort of breaks it had in the console business, he noted.

Bach's now focused on philanthropic organizations, serving on the board of audio gear company Sonos and looking to buy a mid-size family business like the food-service supplies distributor that his father operated in retirement.

Here's a raw video of the event. Apologies for the quality; it was taken with a new smartphone that was supposed to capture high-def video ...:

Just when you think the "daily deals" business has crested, along comes Pirq and its celebrity chief executive with a new twist.

Today Pirq is announcing that it's been chosen to be the exclusive mobile dining deals app for Apple employees in Cupertino, Santa Clara, Sunnyvale and Mountain View.

Chief Executive James Sun said the deal will accelerate the company's expansion, with Apple's imprimatur giving Pirq an extra boost.

The Pirq smartphone app will be offered through an Apple employee benefits program run by Pirq's corporate uncle, Kirkland-based Passport Unlimited.

It's already opening up doors with other companies and associations, Sun said via e-mail.

"It's also a lot easier to sign up restaurants when you can say Apple has agreed to offer this dining app to their employees at work. Every restaurant wants Apple-like employees to come dine with them," he said.

Sun - who gained fame as a finalist on "The Apprentice" - launched the Pirq service in Seattle last September, providing discounts of 20 to 50 percent at participating restaurants.

The Apple deal's the start of Pirq's expansion beyond Seattle to California, where it's now available only to Apple employees. Pirq will expand the service to San Francisco proper by July and open to the general public there by the end of 2012.

Apple is among several tech giants working with Passport Unlimited to provide discount programs for employees. Passport Unlimited's client list includes Microsoft, Oracle, Hewlett-Packard, Intel and Qualcomm.

That would be Rich Barton, the startup wunderkind who founded Expedia as a twenty-something Microsoft manager, spun it into the world's largest travel business and became a serial entrepreneur.

Barton went on to co-found Zillow in 2005 and became a venture partner at Benchmark Capital, the Silicon Valley venture-capital firm that owned 20 percent of Instagram before it was sold earlier this month to Facebook for $1 billion.

From Barton's perch, at least, it looks like another tech boom is under way and money's flowing like the old days, back before 2008.

Barton shared this view -- and tips on how to start and build big companies -- last week with the local chapter of The Indus Entrepreneurs. Here's my edited trove from the event.

On today's climate for startups: "It's pretty frothy. It's a great funding environment, great for the entrepreneurs. There is a ton of money chasing good people with big ideas. It's as snap, crackle and poppy as I've seen in more than a decade. There are lots of exits happening, there are lots of companies going public right now, there is a reasonable amount of [merger and acquisition] activity that's going on. If the market holds up, we're about to enter a phase of serious IPO activity.

On demand for new tech stocks: "The public market, buy-side guys -- the guys who run the mutual funds, the technology-oriented mutual funds -- are starving. They've been starving for a decade for product to buy. It's kind of been fashionable, if not convenient, for companies to not go public, and all of a sudden everything's coming public. I think we're going to see a ton of activity."

On making mistakes: "I think the great skill of the entrepreneurial mindset is the ability to forget mistakes. Learn the lessons from the mistakes, but forget them and not obsess on them and not let your mistakes undermine the confidence you have around the dreams you have. I think that's a big thing."

On spreadsheets: "I tell you, the spreadsheets never work out the way the entrepreneurs and the venture capitalists think they're going to work out. We all know that. ... Rarely does the company end up being what the original idea was anyway. So you've got to have people on the boat who can figure out how to change the fly, put something new on there and be creative and figure it out."

Pitching stories, not numbers: "I'm a PowerPoint guy, not an Excel guy, put it that way. I think people that come in with lots of projections and Excel spreadsheets at very early stages doesn't necessarily bode well. ... It's very difficult to plan the unplannable, so I look more for passion around a story and idea than I do around a spreadsheet."

Mobile, mobile, mobile: "If an entrepreneur comes to me these days and gives me a demo of a website and doesn't demo something on a smartphone, I almost out of hand am not even interested in it, because that shows an unbelievable lack of understanding of how people are actually interacting with the Internet now."

Traffic before revenue: "All of my businesses -- I look for getting a mass-engaged audience first and worrying about a business model second. Expedia was that way, Zillow was certainly that way. ... Get the masses in first, then figure out how to monetize."

On changing course: "Pretty much everything I've been involved with had some kind of pivot. Zillow had a really big one. We had raised money -- my guess is, we had raised $20 million -- before we even figured out what the product was going to be. ... We actually thought the way for perfect price discovery in real estate was going to be auctions."

On raising money: "The whole venture-capital business is one that operates a lot on personal networks that have been established. For people who are trying to get plans in front of me, the best way ... is to have somebody who I know really well and think is smart tell me to take a look at something."

Capital in Seattle vs. Silicon Valley: "There's plenty of money up here. There's a lot more down in the Valley. ... I find that the Seattle startup ecosystem is a few steps behind but on the same path as the Silicon Valley ecosystem."

On Gates and Ballmer: "Bill Gates and Steve Ballmer were my venture capitalists at Expedia. I kind of thought of them that way. When I pitched the idea of Expedia to Bill and Steve, I tried to get them to fund me on the outside. Honestly, I said I want to start my own business and said look, this is a travel business, not a Microsoft software business. They kind of laughed at me and said, 'Who are you going to hire?' But what they did say is look, you may be right, let's get this going internally and if it makes sense to spin it out, we'll think about it."

On spinning off Expedia: "You know, huge credit to those guys: When it came time ... I came to them and said, 'Look, Expedia is on the brink of becoming something huge and interesting and important. If we stay at Microsoft, it will not be. If we spin it out, it might be.' And along with that I asked for $100 million to spend in marketing. Steve Ballmer was my boss at the time [early 1999]. ... He said, you're not getting $1 million from me to market. I said, 'Well, you know what, the public markets will give me $100 million, and they'll give it to me really cheaply, so let's go do that -- let's take the public market's money and turn this thing into something real.' And he said OK and we did it. It was a grand experiment for Microsoft.

"Microsoft has not done anything like that since but it obviously worked out -- it worked out quite well. Expedia was half the size of the largest player in the space when we spun out. Within 18 months, it was twice as big as the No. 2 player."

What's needed to take the startup plunge: "Courage. Think of 'The Wizard of Oz.' We've got the Cowardly Lion, the Scarecrow and the Tin Man. My kind of view of great entrepreneurial leaders is courage for the Cowardly Lion, you've got to have brains for the Scarecrow and probably most important is, you've got to have a heart because you cannot attract people or capital without a heart. People respond to passion; people respond to real feelings, real emotion, things that really matter."

His busy schedule: "When you have eight jobs, it turns out nobody knows when you don't show up to work."

For every Mark Zuckerberg, there are thousands of entrepreneurs still waiting for their big prize.

Sometimes it's just the promise of a steady paycheck.

Consider the fate of Seattle's TeachStreet, an online education directory that's shutting down Feb. 15 after five years. Its breakout moment never came, but the company still had an outsized effect on the region's startup community and ended up teaching a few lessons itself.

Chief Executive Dave Schappell, 43, left Amazon.com in 2004 to work for philanthropies and startups. The idea for TeachStreet crystallized over coffee with another Amazon vet, Jason Kilar, who now runs Hulu in Los Angeles.

With less than a dozen employees, TeachStreet built an online version of the community bulletin board for listing instructional services such as piano lessons and language teachers. Its listings grew to more than 400,000 local and online classes, and investors eventually put more than $3 million into the business.

While TeachStreet built up an audience and began expanding beyond Seattle, Schappell became a prominent member of the region's enthusiastic circle of Web entrepreneurs.

Schappell -- who earlier helped lead the humor website JibJab -- is a garrulous rainmaker who stood out in field of polished networkers.

Among his lasting contributions is the monthly "Hops and Chops" startup gathering at a Capitol Hill bar, where Schappell promised to pick up the tab last Thursday, the day TeachStreet announced its fate.

"He's one of those guys who has 40 hours a day somehow ... and he found lots of time to help out," said Scott Jacobson, a partner at Madrona Venture Group, which invested in TeachStreet, along with Kilar, Jeff Bezos and a handful of others from Seattle. "That's the hallmark of a guy who's not just a good entrepreneur, but cares a lot about the startup ecosystem."

Schappell said the turning point came a year ago.

After four years -- and a painful restructuring in 2009 -- TeachStreet became "essentially profitable" in January and February of 2011.

Google's goal was to improve the quality of its results and demote sites that used sketchy techniques to boost their search presence, but the casualties included scores of sites like TeachStreet's that were built largely around the flow of customers from Google.

"That was the point where we lost two-thirds of our traffic overnight," Schappell said. "We tried a lot of things to try to recover that traffic."

At that point TeachStreet had to decide whether to raise more money for a renewed push or "find a good transition," he said.

"That's when the expense shortfall or the net losses started piling up," he explained. "We looked at things and felt the better thing was to find a partner who already had a lot of traffic and matched our content."

It turned out the partner was right outside TeachStreet's office in South Lake Union, which is now dominated by Amazon's headquarters.

A month ago Schappell subleased TeachStreet's space to social-gaming startup Massively Fun. Then last Tuesday the TeachStreet team began working in its new offices at Amazon, where it's now part of the AmazonLocal team offering daily deals from local merchants.

At first, I wondered if AmazonLocal was going to draw on TeachStreet's directory to sell discounted lessons, but that apparently wasn't part of the deal. TeachStreet will delete all student and teacher customer data when it shuts down.

Amazon spokeswoman Mary Osako said via email that "the TeachStreet.com team will join us to work as part of the growing AmazonLocal team," but didn't provide more details.

So how did the investment turn out for Madrona?

The firm's "happy with the outcome," according to Jacobson, also an Amazon veteran.

"Dave's a really talented entrepreneur and we certainly enjoyed working with him, and Amazon's getting a great team," he said. "In all those senses, it's a great outcome."

But speaking generally, he said that companies wanting to quickly build a team may invest in "experiential IP" -- or an experienced group of developers.

"Sometimes you can accelerate that by having a coherent team that already works well together, has already seen all the challenges, knows what mistakes not to make," he said. "A well-oiled machine that can just hit the ground running and has the background and experience to not make the same mistakes is actually quite valuable."

It didn't get the blockbuster exit, but at least the TeachStreet crew ended up with good jobs at a leading tech company.

The real lesson may be that companies have to be careful about building too much of their business on a single, shifting platform. That's hard for Web startups, given the dominance of Google and Facebook. But Jacobson said new devices and services are giving companies more channels to reach customers now, compared to the early days when startups battled for play on AOL, Yahoo or the "carrier deck" of software that phone companies loaded on earlier cellphones.

"There's a lot of examples -- not just in Web -- where if you're not well-diversified, you run risk as a business," he said. "I don't think anybody says, 'We're going to hitch our wagon to one thing or another,' but in some cases they're more exposed to one source of traffic than others."

He pointed to other companies that did break through, such as Yelp and the Cheezburger network, which built brands strong enough that people navigate directly to their sites.

That may be what TeachStreet clients have to do after the site shuts down next week. One of the first users, Wedgwood art teacher Janet Lia, said TeachStreet was "vital to the growth of my art studio" and brought 90 percent of her students now taking private lessons.

"I'm feeling nervous and tenuous about not having that exposure on the Internet," she said.

Lia started her AWE Studio the same year as TeachStreet and used its free listing service. Later she paid monthly fees for premium services such as marketing templates.

"In this economy, to start a business five years ago and be successful has been pretty miraculous," she said. Now, "I'm going to have to do the work to complete this."

Here's Schappell demonstrating the TeachStreet just before its launch:

File-sharing startup TappIn is dancing the two-step today after being acquired by San Antonio-based GlobalSCAPE for $9 million.

All eight employees of TappIn will remain in Seattle, working on the company's software for sharing and accessing PC files from mobile phones and tablets.

TappIn shareholders may receive up to $8 million more from the deal if revenue and product development targets are met over the next three years.

The company, formerly known as HomePipe Networks, was started in 2009 by veterans of Aventail. Chief Executive Chris Hopen was formerly Aventail's co-founder and chief technical officer, and TappIn CTO and co-founder Parvez Anandam earlier worked for Aventail, Microsoft and Symantec.

GlobalSCAPE is a publicly traded company offering file transfer software and services to businesses and consumers.

"Combining GlobalSCAPE's leadership in secure information exchange with TappIn's strength in secure digital content mobility allows us to deliver a powerful solution for consumers and businesses," GlobalSCAPE Chief Executive Jim Morris said in the release.

A new game studio in Bellevue surfaced today with plans for an online title targeting the "hardcore social gamer."

U4iA Games is developing what it calls an "online-only, hardcore fremium, first-person social game" that will be released in 2012.

Studio founders previously worked on core games such as "Call of Duty" and "Doom," plus "Guitar Hero," "Spider-Man" and "Tony Hawk's Pro Skater."

They already have 14 employees at offices in the QCB office park on 156th Avenue Northeast.

"U4iA Games is grounded in the insight that core gamers desire robust, social gaming options on social networks and mobile devices," Dusty Welch, chief executive, said in a release. "Playtime and dollars are starting to migrate from console to casual and/or mobile gaming and a new segment is emerging - the Hardcore Social Gamer."

Welch and and co-founder and chief creative officer, Chris Archer, earlier worked at Activision.

Archer moved to the Seattle area from Los Angeles last year to head Sony Online Entertainment's Bellevue studio, then Sony shuttered it in March. He was offered a position at Sony's studio in San Diego but opted to start a new studio instead.

A combination of self-funding and angel investment raised $1.5 million to start the studio, which is now raising $5 million in funding.

Called Nextdoor, it's a new platform for creating neighborhood Web sites that function as bulletin boards, newsletters and notification systems. Neighborhoods can use Nextdoor sites - which it calls "private social networks" - to do things like post items for sale, look for a babysitter and organize events.

It's kind of like a neighborhood version of Microsoft's SharePoint collaboration suite.

Barton - a Microsoft veteran who led Expedia, co-founded Zillow and is now a venture capitalist - was prompted to try Nextdoor by its founders in San Francisco. They tried "quietly, but I didn't get it," Barton recalled.

Finally Barton and his wife, Sarah, tested the service in Washington Park, Barton was convinced and put his own money into the startup, one of five or six he's involved with now. Also investing in the company was Benchmark Capital, the Menlo Park, Calif., venture firm where he's a partner.

"Seeing it is the greatest way to get sucked into it," Barton said. "It is a truly useful as well as emotionally appealing way to connect with your neighbors."

In one test, Barton used the site to unload a MacBook Pro that he no longer needed after buying a new one. The site connected him with a neighbor who runs a yoga studio in Madrona. They worked out a deal - a year of yoga for the laptop - and they closed it over a glass of wine at his house.

Nextdoor is free to use. It plans to make money eventually by adding offers to the site, such as referrals to contractors or real estate agents.

It's among numerous Web ventures pursuing the market for hyperlocal services and advertising - a space that Zillow staked out with its real estate value and mapping services.

"Local, social and mobile are the three big vectors of innovation right now," Barton said. "Nextdoor really hits the local and the social well. Additionally it'll be used mobile-y as well but it's not primarily a mobile application."

One differentiator is the privacy controls that Nextdoor applies. Information shared on the neighborhood sites isn't broadcast or shared broadly, as on social networking sites - they're mini social networks accessible only to participating neighbors.

The privacy of the neighborhood sites is key to acceptance. Eventually they could be connected somehow to outside services such as Facebook or Craigslist.

"We've talked about it but there's no explicit plans for that right now," Barton said, adding that the company experimented with Facebook Connect but users wanted a separate registration system for their neighborhood sites.

Zillow seems like a natural partner, to add mapping and property information to the sites.

"We've certainly chatted with them about it," Barton said. "There certainly could be some interesting points of intersection going forward."

Barton said neighborhood penetration so far has been "pretty good" with around 25 to 30 percent of neighbors participating in the 150 or so neighborhoods in 25 states where the service was offered in a pilot program.

Today the service is opening up for anyone to use across the country. To start a neighborhood site, someone needs to become the "founding neighbor" and define the boundary. They need to invite at least 10 neighbors to get the site started.

Nextdoor was started in 2010 by tech startup veterans including Chief Executive Nirav Tolia, a Yahoo veteran who co-founded the epinions.com shopping site. It has about 15 employees in San Francisco and backing from Benchmark, Shasta Ventures and private investors. Barton said it's likely to seek another round of funding in about a year.

More than 600 people are expected at the Social Innovation Fast Pitch event tonight at Seattle Center's Fisher Pavilion, where 14 ventures are making pitches in the final round of the event.

The event's theme is "New Ideas for Social Impact," and presenting ventures include services for organic farmers, special-needs students, alternative energy and K-12 teachers.

Winning non-profits will share awards totaling $100,000. Awards of $75,000 are available for winning for-profit ventures. Judging is by a panel with members from 11 different business, education and philanthropic organizations.

Competitors include two team of high school students and two of college students.

They're all pursuing funding from Social Venture Partners Seattle, a local chapter of SVP. Backers of the event include Ashoka Seattle, Bezos Family Foundation, the Microsoft Alumni Foundation, Social Venture Partners and Bill and Paula Clapp.

"We have had overwhelming participation in this inaugural Fast Pitch event, with 120 applicants and dozens of the area's best civic affairs and business minds participating in the extensive mentoring and judging processes over many weeks," Will Poole, SVP lead partner and fast pitch organizer, said in the release.

For some participants, the exposure was as valuable as the cash awards would be, Poole said at the event.

The top non-profit winner was Viva Farms, which received a $30,000 grant, plus the audience-selected "Most Innovative" and "Best Fast Pitch" awards each worth $5,000.

Here's the full list of presenting companies and the prizes won, as described in SVP's release:

Biodiesel Cooperative: A student led, student run biodiesel conversion lab at the University of Washington, procuring used cooking oil on campus, converting it to industry-grade biodiesel and selling it back to the UW to power part of their on-campus diesel fleet. A non-profit, college team; it won $2,000.

Dynamic Labs: Dynamic Labs develops breakthough solutions to problems faced by children with special needs. It operates a self-sustaining social enterprise incubator to generate ideas for products and services that will help children reach their full potential. A nonprofit, it won the $20,000 Zino Society Award.

FindProz: An "eBay for education," FindProz is described as "the marketplace for private instruction." A for-profit venture, it won a $25,000 investment.

Food N' Me: Food N' Me is a nutrition system that changes eating behaviors in children and families. It claims to be "Fighting childhood obesity with pounds of fun!" A for-profit venture, it won a $50,000 investment.

BOSS: BOSS empowers project owners/managers and minority small businesses with the tools and information to create sustainable social change. A for-profit venture.

MoneySense: Building an interactive website and offering training clinics around educating middle school and high school students about financial literacy and the dangers of financial mismanagement. A non-profit, high school team, it won $1,000.

Northwest Sustainable Energy for Economic Development: Solarize Seattle harnesses the collective impact of community to accelerate solar energy adoption via a group purchasing program. A nonprofit.

SIFF (Sharing Interests Forming Friendships): Breaks social barriers between special needs students and their peers at three public high schools in the Puget Sound and is expanding every year. A nonprofit, high school team, it won $2,000.

Reach Out: Brings an innovative approach to day camps, providing 1:1 counselor-to-camper, week-long camps designed to change the self-impression and life-trajectory of disabled, disadvantaged, and homeless youth. A nonprofit, college team, it won $5,000.

Village: A health and wellness model simultaneously stimulating healthy mothers, babies, families, providers, healthcare systems and the planet. A nonprofit, it won $5,000.

Viva Farms: Viva Farms is helping launch the next generation of organic farmers by providing land, capital, expertise and dedicated markets. A nonprofit, won $40,000 as mentioned above.

Youth Suicide Prevention Program: "K-12 Lessons for Life" is a new web tool that links educators to Best Practices curricula to support school-based suicide prevention and save lives. A nonprofit.

The startup blog post of the day has to be Rand Fishkin's extraordinary piece detailing how SEOmoz was about to receive $24 million in funding, until the lead venture firm backed out at the last minute.

Fishkin speculates that the deal fell through because of a slight dip in July revenue -- even though SEOmoz is on track to double sales this year to $11.4 million and post its third consecutive year of profits.

Personally, I feel burned. This is the second time in 3 years that I've gotten excited about raising a potential round of capital, and it turned out terribly both times. I'm not sure what I did wrong or what I should do differently next time.

SEOmoz, which offers tools and services for search-engine optimization, was going to use the funding to expand beyond SEO and into new categories such as social and mobile. The capital would also cover the rising cost of its Web infrastructure, increase marketing, pay for a new Seattle office and give Fishkin (pictured) and his mother a cash payout.
Today's post is a bookend to a similar post Fishkin published in January 2010, about his last attempt to raise capital. That one also fell through but resulted in a priceless primer on venture capital for entrepreneurs.

Startup bosses periodically post educational, confessional blogs to help their peers navigate common challenges or learn from their mistakes. But they rarely provide so many details or shine so much light on the gyrations of the funding process.

This time around, Fishkin started the quest in November and had a serious bite in May. Negotiations resulted in a deal that would provide $19 million from the unnamed new investor and $5 million from Bellevue's Ignition Partners, which had invested $1 million in SEOmoz in 2007.

The new deal valued SEOmoz at $89 million after the deal closed and provided a $1.25 million payout to Fishkin, the chief executive, and $4.75 million payout to his mother, Gillian Muessig, who started the predecessor marketing company in 1981.

Before the deal was closed, the market had its August dive and VentureBeat prematurely reported that SEOmoz had completed the financing. Fishkin speculates in the blog that someone may have warned off the VC firm after reading the VentureBeat story, or that the firm became skittish after the market's dip.

The deal fell through last week and Fishkin informed his team on Aug. 24. In the memo, posted in today's blog entry, he said the company will now decide whether to see other investors but he's inclined to go it alone. An excerpt:

"While this is disappointing, there is some upside. We don't want a fair-weather friend for an investor on our board, nor someone who doesn't fully believe in the company's future and potential. We are also free to pursue the course we feel best without having to please a new, outside investor on the board, who might have pushed for us to run fire drills to make up missed revenue targets rather than focus on the long term."

Here's the pitch slide deck that SEOmoz used in the process, to persuade its early backer, Bellevue's Ignition Partners, to participate in the new round. Note that he's pitching SEOmoz as Seattle's next $1 billion company:

Contour - a Seattle maker of wearable video cameras - is one of the nation's fastest growing private companies, according to the new Inc. 500 list.

Contour is ranked seventh on the list, up from 183rd on last year's list.
The company - which emerged from a University of Washington business plan competition- reported 11,663 percent sales growth over the last three years and now employs 57 people.

The stats included with Inc.'s list say Contour's revenue grew to $15.1 million last year from $128,635 in 2007. That's with two products - a 1080p wearable camera (pictured) that lists for $280 and a $350 version that also captures GPS locations - plus a Web site where users share their "adventure sports" videos.

"It's beyond my wildest dreams to evolve Contour from a project bootstrapped out of a garage to the seventh fastest-growing private company in the nation," Chief Executive Marc Barros said in a release.

A group of Seattle startup veterans today launched a new health information portal that compiles medical research into a searchable, consumer-friendly format.

Called Medify, the business has $1.8 million in backing from angel investors and Voyager Capital. It's led by Chief Executive Derek Streat, a startup veteran who earlier worked at Classmates.com and co-founded AdReady.

Medify began running a private beta in May, opened the site publicly in July and today formally announced the business and its funding.

Registered users get updates on topics they're researching. The site also has social tools for users to share information and updates with friends.

Medify plans to make money from pharmaceutical companies, medical institutions and others who will pay to embed links into the site.

Medify joins a series of Seattle startups that have developed online health information services.

One was the portal Trusera, which sought to supplement its medical information with user-generated content in the form of personal stories submitted by users. It began in 2008 and raised more than $3 million before shuttering in early 2009.

Medify is counting on the quality of its information to make the site a success. The company has seven fulltime employees and seven contractors at its office in Queen Anne.

Investor Bill McAleer, a Voyager partner, said in the release that the new startup has a proprietary solution that "fills a gap in the health information industry by providing real medical research that is sourced from researches, scientists and other professionals and backed by hundreds of millions of real patient outcomes."

Former Microsoft design guru and Xbox executive J Allard is backing a Portland-based company called The Clymb, whcih offers flash sales of outdoor gear.

Allard is among a group of investors providing $2 million worth of series A funding for the company, which began offering the "private sales" in 2009 and now has more than 1 million unique visitors per month and "several hundred thousand" members.

The Clymb's going to use the funding to expand its offerings, add social features such as a referral reward program, and begin offering local and global travel products.

Allard was chief technology officer of Microsoft's Entertainment and Devices divivision when he left in May 2010, reportedly after the "Courier" tablet project he was leading was spiked by Microsoft's senior leadership.

Now he's serving on The Clymb board as well as investing in the company. Other backers include the Oregon Angel Fund, Walden Venture Capital and other individual investors.

"This round of funding enables The Clymb to expand the team and innovate at a pace that matches our ambition," Allard said in a release.

Glympse, a Redmond company that makes a popular location-sharing smatphone app, today announced that it raised $7.5 million from Menlo Ventures and Ignition Partners.

The company also said that its app now has more than 1 million users.

There are a number of tools for broadcasting your location from a smartphone and posting it to social networks, like Glympse does. The company's special trick is that enables users to specify how long their location info will be visible, limiting the privacy exposure and making it useful for one-time alerts.

"This funding will play a key role in achieving our ambitious growth plans," Bryan Trussel, co-founder and chief executive, said in the release. "Our plans for new products and features will strengthen our mission to provide a simple and sleek way for our growing user base to share location."

The company now has six employees and plans to triple the size of the team over the next year.

Trussel was director of casual games at Microsoft before starting Glympse in early 2008.

Here's a screenshot provided by the company. Perhaps the team stopped for java on the way to Menlo Ventures:

Smith & Tinker, a once high-flying Bellevue game startup, is resurfacing this week with a new Marvel superhero game for Apple's iPad, iPhone and iPod Touch.

"Marvel Kapow!" features characters such as Thor, Wolverine, Spider-Man and Captain America. Players uses touchscreen gestures such as flicks to slash enemies with Wolverine's claws or shoot them with Spidey's web.

Smith & Tinker was started in 2007 by Jordan Weisman, a former Microsoft creative director. The company raised more than $29 million from a-list backers including Paul Allen and a group of venture capitalists.

The money was mostly used to develop a line of handheld game players aimed at young boys and built around a sci-fi monster game called Nanovor that launched in 2009.

That project was dropped last year after a restructuring that eventually cut the number of employees from around 55 to under 10. A recent check found Nanovor gear for 99 cents at Amazon.com, although the game's no longer supported.

Weisman remains on the board and contributes to creative work but the company's now led by Disney veteran Joe Lawandus. The company also relocated from Bellevue to space near the downtown Seattle waterfront.

"We've had a pretty interesting ride over the past few years," Lawandus said.

Lawandus said the company still has enough cash to build at least one more game based on Marvel characters. The company last year reached a licensing deal with Disney, Marvel's owner, that enables it to build casual games based on all characters in the Marvel universe.

"We're super excited about what we think tablets can bring to the mobile gaming space," he said, adding that the company is trying to reach big audiences with the brands used in its games.

"Marvel Kapow!" is available through iTunes in free versions with seven levels and advertising, or ad-free versions with 26 levels and additional characters that cost $1.99 for iPhone and iPod or $3.99 for iPads. Later the company may develop versions for Android and perhaps Windows, he said.

That's according to a report on ReadWriteWeb.com, which interviewed Power for an extensive story.

Power told the site that he's building a team to "manage, analyze and ultimately productize" the results of its data analysis:

"I'm going from the top of the stack (finance, ad, core business metrics) all the way down to the individual split tests that developers are creating. Infrastructure metrics, usability metrics, qual and quant metrics. If it has a number or is a qualifier, I'll be interested in making sense out of it, if there's a business reason to do so."

Networking really is worthwhile for startup entrepreneurs, or at least the ones who want to sell their companies to Google.

Dan Shapiro said friendships and chance encounters helped him start comparison shopping site Sparkbuy last year and sell it to Google in a deal announced on Monday.

Shapiro and Scott Silver, site director of Google's Kirkland campus, explained in an interview how the deal went down and a few more details of what's next for the Sparkbuy team.

They also left the strong impression that Google is still hunting for startups to acquire in the Seattle area and beyond.

Google may have to pick up the pace if it wants to meet the aggressive growth projections it laid out at the start of the year. It bought 48 companies last year, but only 10 so far this year, as it approaches the mid-year point.

Maybe that's why it moved so fast on Sparkbuy.

Silver kept an eye on the company since it was just an idea Shapiro was batting around with friends. Shapiro had had trouble shopping for a new laptop and thought there was a need for a new comparison shopping site. He floated this idea while having dinner with Silver in early 2010, and heard the magic words.

Later, Shapiro received more encouragement when he happened to sit next to another Google employee on an airplane and talked about the startup. Sparkbuy launched a beta version in November and formally launched March 29.

Shapiro is a veteran of Microsoft and RealNetworks who started mobile photo business Ontela in 2005. It merged with News Corp.'s Photobucket in 2009 and Shapiro left his management position there in February 2010.

While starting Sparkbuy, Shapiro also stayed in contact with Jonathan Sposato, another Seattle entrepreneur who sold his company, Picnik, to Google.

"One of the things that was really encouraging was that going to Google wasn't something totally unfamiliar -- there were a whole bunch of people I knew and respected," Shapiro said.

It wasn't confirmed during the interview, but I wonder if Sposato's a model for what may happen to Shapiro at Google.

Sposato was chief executive of Picnik, a photo editing service, when it was acquired in March 2010. He's since been promoted to lead not just Picnik but all of Google's photo business, including a team in Santa Monica, Calif.

Shapiro downplayed the chance he'll play a larger role. "I'm still learning how the conference phones work," he joked.

(Although Sposato had a similarly awkward entrance -- on his first visit to the Kirkland office, he smashed a Segway scooter into a drink fridge, throwing him off and marking his arrival with a big dent in the appliance.)

Silver said the acquisition is one of the benefits of having a big engineering presence in the Seattle area. The company employs more than 800 in Kirkland, where it occupies about 150,000 square feet, and in Fremont, where it's expanding to 78,000 square feet.

Silver, a former Amazon.com manager, said Sparkbuy fits with Google's broad mission of taking information that's available online and making it useful for customers.

"Dan had a novel take on that and we realy liked what we saw," he said.

Although Sparkbuy's shopping site was shut down when the deal was announced, Silver said Google was acquiring more than just three talented developers.

"From my perspective I wanted Dan to build his business at Google and not outside Google ... this isn't about talent, this is about the ideas and executing them," Silver said.

Terms of the deal weren't disclosed. Shapiro would only say "this was an unexpected but delightful outcome."

Shapiro said it usually takes about six years for a startup to have some sort of exit. Being able "to proceed directly to the 'build a business at Google scale' while skipping a whole bunch of those intermediate years of financing and fundraising and everything else, that was just too great an opportunity."

The Sparkbuy team is going to work with a group in Kirkland that last week released Advisor, a site where consumers can comparison shop for loans and credit offers.

"This problem is not an easy problem," Silver said. "It's very hard to figure out how you get enough information about services so you can help consumers make decisions about complex financial products."

Sorting through the options available on different laptops is similarly complex, they said. Shapiro said the "next great frontier" is using online information to directly answer consumers' questions and help them solve problems.

Google hopes to continue tapping the local cluster of expertise in online shopping, which includes companies such as Amazon.com, Expedia, REI and Nordstrom.

"Seattle's just a gold mine for expertise in these areas," Shapiro said.

We're stoked about the opportunity to share our vision for search with a broader audience. And while we won't be offering services at sparkbuy.com any more, stay tuned for truckloads of new awesome from our team at Google.

Google provided a statement confirming the deal:

Were thrilled that Sparkbuy will be joining Google. They have built an impressive comparison shopping site that is simple in design yet powerful for consumers, and we think their expertise, vision and energy will be a great addition to our Kirkland office.

Kobo today announced a new touchscreen version of its reader that will go on sale for $130 in June.

The device uses an E Ink display like Amazon's Kindle, which has yet to introduce a touchscreen version, and has Kobo's "Reading Life" software with social sharing features and a gamelike reward system.

It has a 6-inch diagonal screen, a software keyboard, a quilted back and a single "home" button a la the iPad. It connects to the Web and Kobo's bookstore via WiFi or a USB cable.

Kobo has been selling e-readers since May 2010 and initially allied itself with Borders. The company has extended its software platform, which is now bundled with tablets from Samsung and Research In Motion. It claims to have 3.6 million users in 100 countries.

Kobo is based in Toronto, Canada, but it established a Seattle presence in 2010 when it hired Todd Humphrey, a former Amazon.com director of business development, as its executive vice president of business development.

The company recently raised $50 million in funding and is now planning to open a full office in Seattle. Humphrey said it should be established by the end of the year.

"Whether it's five or 15 or 20 people, we'll see," he said.

Humphrey said the new Kobo eReader Touch Edition will be a serious competitor to e-reader made by his former co-workers at Amazon and the Barnes & Noble Nook.

"I think this device puts us ahead of them from a device standpoint," he said.

Humphrey said major retailers are very interested in selling the touch reader and it will help the company as it begins an expansion in Europe.

After launching a string of hit humor Web sites, Ben Huh is turning his attention to online news.

The founder of Seattle-based Cheezburger -- a network of websites, including Icanhascheezburger.com and failblog.org -- detailed his plans in a wide-ranging talk to a group of Seattle journalists Tuesday night.

Long before he became the king of funny cat pictures on the Web, Huh studied journalism at Northwestern University's Medill school. He graduated in 1999 at the peak of the dot-com boom and was recruited into the world of online startups.

Now, having drunk and "thrown up" journalism school Kool-Aid, he wants to apply what he's learned to develop a new way to present and consume news.

His plan is to create an open-source platform that people could use to be "amateur editors," designing and managing their own blend of online news sources and advertising. If there's enough interest he'd like to develop it as a public tool like blogging platform WordPress.org.

The end product sounds like a portal creation tool along the lines of Netvibes.com, a site that lets users customize a personal home page with widgets and news feeds.

Huh floated the project -- and riffed on topics ranging from Fox News to Twitter and democracy -- at a Tuesday meeting of the Online News Association and regional chapter of the Society of Professional Journalists. Afterward he said the news platform is a personal project of his, separate from Cheezburger.

Huh, whose sites draw on material generated by their online audience, believes people are able to develop a "sixth sense" about what's truthful online.

"We are learning to use our emotional brain and our gut to figure out what is and isn't good news," he said.

Huh believes that editors must put more emphasis on topics that appeal to their audience, as opposed to stories that editors deem to be important.

"The role of, I think, the editor tomorrow is going to be more about understanding the tastes of their audience rather than trying to figure out what should and shouldn't be covered based on some arbitrary standard by the media," he said, adding that "a great editor knows how to increase ratings and also keep their integrity."

Social media is one way to figure out audience interests, he said: "Social media gives us a lot of data about what people are looking for."

Sites need more than viral hits that temporarily bring a large number of visitors, he said. They need to consistently provide good content that gets people to return again and again.

Selecting -- or curating -- a mix of news is different than reporting, he said.

"One of the things that I've found out is that people are really, really, really good at curating," he said. "People are really good at filtering and curating, more so than they are at creating content."

Huh continued: "The ability to curate requires that you sit at a computer. The ability to create requires that you get off your computer and go out there. Very, very different things and different people are willing to do that."

Here's a lengthy video that captures most of Huh's presentation Tuesday. He was interviewed by Cory Bergman from MSNBC.com.

A Farecast veteran today announced that he's raised initial funding for a new mobile analytics startup called Sewichi.

The company's joining a small cluster of mobile analytics ventures in the area and hopes to establish "a new standard in terms of mobile measurement," Chief Executive David Shim said in the release, announcing seed funding from Madrona Venture Group.

Shim was previously director of product and operations at media measurement service Quantcast. Earlier he was at WebTrends and Farecast, which was also funded in party by Madrona and sold to Microsoft in 2008 for $115 million.

Advisors to Sewichi include Shane Atchison, chief executive of WPP's Zaaz agency; Jeff White, the first developer hired at Farecast; and Peter Kassakian, lead optimization scientist at Quantcast.

Sewichi - which is pronouced "say-we-chee" - has four employees who are now working out of Madrona's offices. The companies aren't disclosing the amount of funding.

Two months after raising $30 million, Seattle-based Cheezburger (the humor network formerly known as Icanhascheezburger.com) spent a chunk of the money buying New York-based Know Your Meme.

Know Your Meme operates a sort of meme-o-pedia - an online reference guide that aggregates and categorizes the ideas or concepts that build up enough online traction to become what's known as a meme.

Started by Rocketboom founder Andrew Baron, Know Your Meme "is dedicated to giving people an accurate inside look at up-and-coming as well as already viral Internet memes," according to the release.

"Since Cheezburger is the playground of choice for millions of Internet culture fans, this acquisition is a natural compliment for our community," Cheezburger Chief Executive Ben Huh said in the release. "Now, in addition to delivering 5 minutes of happiness through I Can Has Cheezburger?, FAIL Blog, Memebase, and The Daily What, we can help the public understand the origins of memes and how content goes viral on the Web."

Tubefilter News reported that Know Your Meme sold for a "low seven-figure sum," based on "sources close to the deal."

Cheezburger spokeswoman Deanna Leung Madden said the company "can't confirm" the sale price.

The four employees of Know Your Meme are now part of the company's New York office - "Cheezburger East."

If you're still wondering about memes, here's how the companies define an Internet meme, as opposed to viral content:

An Internet meme is a piece of content or an idea that's passed from person to person, changing and evolving along the way. A piece of content that is passed from person to person, but does not evolve or change during the transmission process is considered viral content.

Tier 3, a 5-year-old Seattle enterprise software company, today announced its first round of venture funding.

The company is taking $8.5 million from Ignition Capital and Madrona Venture Group, and adding Ignition's John Connors and Madrona's Matt McIlwain to its board.

Tier 3 has about 100 customers in the consulting, online commerce, discovery and software-as-a-service industries, including Microsoft and Slalom Consulting.

Chief Executive Adam Wray said in the release that the company's "uniquely positioned to capitalize on the migration of traditional IT and data center services to the cloud by providing standards based, optimized infrastructure for running mission-critical applications over IP."

Click Forensics is renaming itself Adometry and will continue investing in the Redmond office, adding two more employees immediately. Adometry now employs five and Click Forensics employs about 40.

Adometry provides a service analyzing the effectiveness of online display ads. It was started in late 2008 by John Dietz and Rob Perrier, who left the Disney Internet Group's Seattle office to start the company.

Terms of the deal weren't disclosed, but the companies said Adometry was sold for a mix of cash and stock in Click Forensics. Adometry earlier raised $450,000 from angel investors.

"The key challenge online marketers face today is accurately measuring and improving the performance of their online ad campaigns as they flow across a changing landscape of ad networks and Web sites," Paul Pellman, chief executive of Click Forensics, said in a release. "With the addition of ad verification technology from Adometry, our ad analytics suite integrates all the pieces of display campaign measurement and optimization in a single offering for brand advertisers."

Judges couldn't decide on the top commercial tech product or service in the Washington Technology Industry Association awards program tonight and declared a tie.

Sharing the award are DocuSign, a leading electronic signature platform, and Isilon, the enterprise storage vendor that was acquired last November by EMC for $2.25 billion.

The tech trade group announced the winners of its 16th annual Industry Achievement Awards at a dinner event at the Showbox Sodo.

"This impressive group of companies shows that Washington state continues to be a place where passionate technologists can leverage the talent and resources here to achieve great success," WTIA Chief Executive Susan Sigl said in a release.

Here are the other winners:

Consumer product or service of the year: Swype, which offers a text-input system for touchscreen devices

Service provider of the year: HasOffers Affiliate Tracking Program, a cloud-based platform for retailers and brands to manage affiliate programs.

Best early-stage company of the year: Ground Truth, a mobile analytics company

Best seed-stage company of the year: SPARQcode, which provides marketing tools using QR barcodes scanned by customers with mobile phones.

Innovative manufactured product of the year: XKL and its "DarkStar" fiber optic transport products for enterprises to link campuses and datacenters and create regional networks

Best use of technology in government, nonprofit or education: OpenDataKit.org, a collection of free data collection tools

Technology leader of tomorrow: Gizan Gando, a sixth grader at Asa Mercer Middle School in Seattle.

To accommodate new employees that it expects to hire this year, Google is expanding its offices in Seattle and Kirkland.

The company's been talking up its growth plan over the past month, saying it expects to add more than 6,000 employees this year globally.

After that news came out, Google received a record 75,000 resumes in a single week. Locally, applications to the Seattle and Kirkland offices jumped 62 percent above the weekly average.

Google's hiring talk comes as tech companies large and small ramp up their hiring after running lean through the downturn. The situation is exacerbated in Seattle by Silicon Valley companies such as Facebook, Zynga and Salesforce.com setting up new engineering offices here.

Competition for top talent is leading to dot-commish hiring gimmicks, including referral bounties of $10,000 to $12,000 being offered by Seattle startups SEOmoz and EnergySavvy.

Seattle and Kirkland Google managers wouldn't talk about competing for talent with any particular company, but in a meeting today they emphasized the thoroughness and responsiveness of Google's hiring practices.

Google is expanding its Fremont campus by leasing 30,000 square feet formerly occuped by Getty Images, adjacent to Google's building just north of the Fremont Bridge.

In Kirkland, Google began moving employees into the third building on the campus it opened in 2009.

Combined employment at the two sites grew 50 percent last year, to about 800 people, according to site managers Brian Bershad and Scott Silver.

Google's likely to hire more than 100 this year,but the managers wouldn't provide specific forecasts. However, they offered plenty of clues and hints to inform speculation about what to expect.

"I do expect, given what we're seeing in terms of resumes and the amount of resources we're putting into the hiring process, that we will grow substantially in 2011," Bershad said.

Google is expecting 2011 to be the biggest hiring year in its history, and the "Sea-Kirk" facilities should get their share.

"In this area we've always grown faster than the rest of Google, always, every year," said Silver. "It's mostly a testament to the talent that are here."

Google is working on a number of projects in the local offices, including search, messaging, maps, ad systems and the Chrome browser and operating system. Bershad said a particular emphasis in recruting this year will be for user-experience experts, to improve the design of Google products.

Unlike most of Google's regional offices, the Seattle and Kirkland facilities are almost entirely filled with engineers, with more than 90 percent of the staff involved in research and development, as opposed to sales and administration.

Google's engineering presence in Seattle began in 2004 with three employees in Kirkland.

The company leased the three-building Kirkland campus while it was under construction in 2007 and moved into two of the buildings in 2009. Silver said Google will eventually fill the third building, which has about 75,000 square feet of space.

Among the occupants may be former employees of Widevine, a Seattle digital-rights management software company that Google acquired in December. At the time, plans were to move the 60 Widevine employees to the Kirkland campus.

Less than a week after he quit Conceivian, Seattle startup impresario Marcelo Calbucci is launching something new.

Calbucci's Seattle 2.0 startup news organization has started a new event series called Seattle Tech-N-Tell, featuring six startups at a time demonstrating their products on a stage. The first one begins at 5:45 on Feb. 22 at The Crocodile in Belltown.

Calbucci, a Microsoft veteran, started Seattle 2.0 and the late social/family network service Sampa before joining Seattle startup lab Conceivian. He left Conceivian last week, telling his Twitter followers he's "looking to build my next startup."

Tech-N-Tell is not Calbucci's next gig. "It's just something I'm doing because I see a gap on ways for tech entrepreneurs to showcase their products and I thought I coudl help," he said via e-mail.

If you're going to attend, dream up a startup idea before registering, if you don't already have one in your back pocket.

Tickets are $25 for startup founders, "pre-entrepreneurs," job-seekers and "startupers." Investor types and service providers are charged $45, which is also what "others" must pay to attend. Students are charged $15.

There is no charge for startups to present. More details are at the Seattle 2.0 site.

Brad Lovering, one of Microsoft's top engineers until he left last year, is heading a new Seattle office for Splunk, according to a report by Mary Jo Foley.

Lovering is now vice president of development platform with the San Francisco-based company, which provides an enterprise IT data management system used by thousands of customers.

During his 24 years at Microsoft, Lovering rose to become one of the company's elite Technical Fellows.

Splunk investors include Bellevue's Ignition Partners, a venture firm led by a number of Microsoft veterans.

UPDATE: Lovering told me he'll be hiring five to 10 developers over the next year to work at Splunk's office, which is going to be in South Lake Union.

Ignition also announced today that Frank Artale is joining the firm as managing director.

Artale worked at Microsoft before joining a series of enterprise startups, including several backed by Ignition. He was chief executive of Consera before it was sold to Hewlett-Packard, and vice president of XenSource before it was sold to Citrix, where he was most recently vice president.

Ignition's release said Artale will focus on core infrastructure, networking and security investments for Ignition Venture Partners IV, a $400 million fund.

Last week, Kiha laid off an undisclosed number of its employees and on Monday it ended a public beta test of its software for organizing contacts and other information on Android-based mobile phones.

Allen invested $20 million in the venture before its "Aro Mobile" application was unveiled at November's Web 2.0 conference in San Francisco. The software received attention from national media outlets.

Kiha's chief executive and co-founder, former Microsoft manager John Lazarus, stepped down later in November. Kiha's website now lists Chris Purcell -- vice president of technology at Allen's Vulcan umbrella company -- as its top executive.

Spokesman David Postman said Allen isn't folding the company. He wouldn't comment on whether the company has been shopped to potential buyers.

"We're going through an ongoing assessment of what the best way to deliver that product is," Postman said. "The company still operates. We've got dozens of people working there who are working hard to figure out the best way to get this in the hands of consumers."

A news release issued last fall announcing Aro's public debut said it was "was born out of Microsoft co-founder Paul Allen's vision for a more intelligent mobile experience and was developed by Kiha Software during nearly three years of work by a team of nearly sixty talented professionals in Seattle, Washington."

Seattle startup Swype has another Guinness World Record involving its text input technology.

A Texas man paralyzed by a hang-gliding accident used Swype with a special head-tracking device to set the record for fastest hands-free typing by someone paralyzed from the shoulders down.

Hank Torres, who was injured 30 years ago, used the setup on a Windows 7 PC.

He took 83.09 seconds to enter the standard Guinness phrase used for these record attempts, "The razor-toothed piranhas of the genera Serrasalmus and Pygocentrus are the most ferocious freshwater fish in the world. In reality they seldom attack a human."

Torres is an engineer who uses Swype to write down his inventions, including several patented wheelchair products, according to Swype's press release today.

The record was announced Friday in Orlando, Fla., at the Assistive Technology Industry Association Conference. It follows a record for standard texting set last year by a Swype employee.

Swype now bundles a free beta copy of its software with the TrackerPro head-tracking device, which was invented by Swype co-founder Randy Marsden.

Tableau Software is expanding yet again, opening a new office in Google's former digs in downtown Kirkland.

The business intelligence/data visualization software company plans to immediately hire 20 people at the new office and eventually have 100 employees there.

Tableau is based in Fremont, where the company doubled employment last year. In a release today, the private company said its 2010 sales grew 106 percent to just under $40 million and it plans to hire a total of 150 this year.

Google's local presence began in Kirkland and extended west to Fremont, where it now has a second cluster of offices just across the bridge from Tableau.

Bellevue-based Motricity announced today that it's buying Adenyo, a Canadian mobile ad company with reach in Europe and a blue-chip client list, including Ford, McDonald's, Coca-Cola and Paramount Pictures.

Motricity's paying $100 million - at least half in cash - and may pay up to $50 million more over the next year, depending on Adenyo's financial performance.

Toronto-based Adenyo had 2010 sales of around $20 million, according to Motricity's release.

Adenyo provides highly targeted mobile advertising and analytics. Its technology will be rolled into Motricity's mCore Platform, the company said.

"Adenyo's technology, mobile marketing and advertising expertise and their long-standing relationships with powerful enterprise customers will significantly strengthen our position in the mobile data services ecosystem," Motricity Chief Executive Ryan Wuerch said in the release.

Motricity's up about 2.5 percent to $19.84 this morning. More details will be provided by the company during a 2 p.m. conference call.

Seattle social networking/shopping startup Lockerz took a big leap into online photo sharing today, buying Plixi, a San Diego-based service used by a number of celebrities, including Justin Bieber, LeBron James and Seth MacFarlane.

It's the latest of several deals by Seattle tech companies that are bulking up staff and features as they head into 2011.

Plixi, which used to be called TweetPhoto, is handling more than 1 billion photos a month and draws 31 million unique visitors a month. Its platform is pinged more than 67 million times a day by other Web services.

Lockerz will continue to operate the photo platform, and give Lockerz members the ability to upload, share and discuss photos.

"The acquisition enables Lockerz to offer its millions of members the most social and easy-to-use photo sharing experience, as well as introduce millions of Plixi customers to Lockerz' interactive, engaging and rewarding site features, including e-commerce, music and videos," Lockerz founder and chief executive, Kathy Savitt, said in the release.

Savitt, who led a Seattle PR firm before joining Amazon.com and then American Eagle Outfitters, founded Lockerz with Liberty Media in February 2009.

Liberty Chief Executive Greg Maffei personally invested $4.2 million before Lockerz took an undisclosed amount of venture funding from Kleiner Perkins in May 2010.

Lockerz claims to have nearly 18 million members using the social network, in which they can earn discounts by encouraging purchasing by their friends.

Plixi raised $2.6 million in its first venture round in March 2010. Its eight employees will remain in San Diego.

BlueKai provides data that advertisers use to target online marketing. It's using the TrackSimple tools in a new "data management platform" that was also announced today.

BlueKai designed the platform, aimed for use by online marketers and ad agencies, "to make data utilization as easy as plugging into a socket and getting electricity," Chief Executive Omar Tawakol said in a release.

TrackSimple was incorporated in October 2007 and is led by a group of former Amazon.com engineering managers.

Jon Ingalls, chief executive, was director of performance at Amazon and Ajit Banarjee, chief technology officer, was a principal engineer who worked on Amazon's software load balancing system.

TrackSimple raised $2.5 million from Ignition Partners in 2008. In an SEC filing Monday, BlueKai said it issued stock worth $6.8 million "in connection with the merger."

BlueKai has raised more than $30 million from investors, including $21 million a year ago.

Seattle sports software startup Korrio now has $3.3 million to take its best shot.

The 13-person company has been developing a "sports automation platform" for youth soccer leagues and other sports organizations. Called Playflow, the system includes league management tools and social networking tools.

Today it's announcing that it received $3.3 million in funding, led by John Connors at Ignition Partners. Also pitching in are Martin Coles, former Starbucks chief operating officer and Reebok and Nike executive, and Sam Schmidt, a former Indy driver and owner of Sam Schmidt Motorsports.

Korrio was started in January 2009 by Steve Goldman, who was chief executive at Isilon Systems until a management shakeup in 2007. Before that he was a sales executive at F5 Networks.

Goldman initially funded Korrio himself, after being involved in youth sports through his son and daughter.

"No one had been doing a good job applying modern technology to the family as well as the sports experience,'' he said.

Washington Youth Soccer is the first customer of the software.

Goldman said the money will fund product develoment and sales and marketing. It should also help Korrio grow to more than 20 employees, he said.

Kirkland startup Inrix is announcing that Audi will use its traffic data services in a new in-dash navigation system the auto maker is debuting in the 2011 A6 in Europe in May.

It's the third major carmaker -- following Ford and Toyota -- to use Inrix's traffic data, which extends beyond highways to arterials and side streets using crowdsourced information from vehicles using the system.

So far 4 million vehicles use the system, mostly in North America, and Inrix has more than 125 customers, including states, online mapping services and mobile application providers.
Audi's system (screenshot at left) will use Inrix data to provide real-time traffic information, alerts and directions influenced by traffic conditions. Plans for a U.S. release of the Audi system weren't disclosed.

Inrix sales have grown an average of 90 percent a year over the past three years, and employment will grow from 75 to more than 100 by the end of the year, Chief Executive Bryan Mistele said.

The company is profitable and on track for an initial public offering in 18 to 24 months, said Mistele, who used to lead Microsoft's automotive software group.

"Our goal is to build this into a billion-dollar business and be the dominant provider of traffic data and services worldwide," he said.

The Inrix system draws on statistical analysis techniques developed in Microsoft's advanced research group, which licensed the technology to the startup.

Founder Ben Huh has leveraged the success of cute kitten pictures with funny headlines into a major media network of profitable humor Web sites that draw more than 16.5 million people and generates more than 375 million page views per month.
The funding - which is being announced Tuesday - cements Cheezburger's position in the major league of Web startups - at least in Seattle, where it's rare for consumer-focused ventures to raise that much capital.

Leading the investment is Boulder-based Foundry Group, which has backed hits such as social game company Zynga. Also participating in the round are Seattle's Madrona Venture Group, Avalon Ventures and SoftBank Capital.

"In just over three years, Ben Huh and his team have amassed a treasure trove of websites that mainstream consumers love," Brad Feld, Foundry's managing director, said in the release. "Already challenging the online traffic of traditional media companies, Cheezburger has an opportunity to surpass the industry heavyweights to become the world's largest humor network."

But it doesn't sound like a problem with Cubeduel's sassy application. The issue was apparently volume, not tone.

Cubeduel co-founder Tony Wright said it appears to have hit an automated rate limit on accessing LinkedIn.

"We've been throttled by them," he said by email.

Wright said Cubeduel has been exchanging messages with LinkedIn and is "hopeful that we can get things opened back up."

UPDATE: I just heard from LinkedIn's spokesperson, who said the company didn't shut down Cubeduel.

"The application was using our open LinkedIn Developer Platform, which has a daily access limit that is publicly documented. Our developer platform limits are designed to protect our members, and have been in place since the platform program was introduced a year ago."

LinkedIn is communicating with Cubeduel "to discuss how they can move forward. We are always interested in seeing our platform used in creative, innovative new ways by developers."

UPDATE: Wright said Cubeduel is back after LinkedIn "graciously raised the ceiling for us late Friday evening."

"The Splat Interactive name embodies our ability and our commitment to continue helping media companies and millions of consumers globally interact with rich content on the device of their choice whether in their living room or in their purse," he said.

Splat was started in April and now has 14 employees in downtown Redmond. Freeman formerly co-founded Bellevue's VoiceBox Technologies, and Chief Technology Officer Stephen Fishburn was vice president of UIEvolution.

Deeper reporting turned up the rest of the story of Splat.

Officially, the name stands for Songs, Places, Locations and Things -- the information drawn from TV shows for the company's Yahoo TV application, according to Neslihan Toraman, product marketing manager.

But the real genesis of the name was a company meeting, Toraman explained via e-mail.

Freeman was trying to describe the stars used in a program rating feature "and the only term he could think of was the old Unix term 'splat,' " which refers to an asterisk.

"These finalists represent the most creative and innovative companies and individuals in our industry and deserve the highest congratulations," Susan Sigl, WTIA president and chief executive, said in the release.

Here are the finalists in different categories, chosen by a group of 31 judges from the tech, government and education sectors:

Commercial Product or Service of the Year: DocuSign; Isilon Systems; thePlatform for Media, Inc.

Consumer Product or Service of the Year: Bonanza; Logos Bible Software; Swype

Service Provider of the Year: Concur; HasOffers; Hubspan

Best Early Stage Company of the Year: Ground Truth; Lockerz; Off & Away

Best Seed Stage Company of the Year: Sparkbuy; SparqCode.com; WhoCanHelp.com

Best use of Technology in the Government, Non-profit or Educational Sector: CityClub - Living Voters Guide; OpenDataKit.org (part of University of Washington's computer science school); Washington State Ferries

Award for Excellence in Teaching: Barbara Franz, Moses Lake School District (math); Nancy Pfaff, Lake Washington School District (math); Debra Strong, Everett School District (science); Dawn Sparks, Thorp School District (science)

The first major CES 2011 announcement for a Seattle-area company is from Inrix, the Kirkland provider of traffic and vehicle information services.

Today, Inrix announced that it's going to provide real-time traffic information to "Entune," Toyota's response to the successful Ford Sync in-dash multimedia system. Entune, which is appearing in some Toyotas later this year, connects to online services via driver's mobile phones.

Inrix characterized the deal as the first of a series of collaborations with Toyota. The company is also working with Ford on its Sync product and mobile applications.

Inrix is "staffing up heavily" with about 15 open positions to support the Toyota work and a contract with an additional automaker that will be announced later this month, spokesman Jim Bak said via e-mail. That's on top of 20 employees added over the last year, which has brought the company to 70.

Online investment site Kapitall is announcing Friday that it raised $7.3 million in its first financing round.

Kapitall runs an online investing site that has drag-and-drop tools and social media featurres. It's designed to appeal to younger investors.

The company was started in New York by veteran game developers. It's team now includes a former Apple interface designer, Cordell Ratzlaff, and Stephan Roche, former Sharebuilder general manager.

Kapitall's headquarters are split between New York and Seattle, where Roche and four other employees are based. Altogether the company has 13 employees.

Investors in the round include Bendigo Partners, a firm started by the former president of E*Trade; Strauss Zelnick and ES & Partner Ventures in Stamford, Conn. The deal also involves the conversion of $5.5 million in previously issued promissory notes.

Bellevue educational software company GlobalScholar is being acquired by a Texas company that provides online student testing and assessments.

Harland Clarke Holdings, which owns the Scantron education testing company, is paying $140 million in cash for GlobalScholar. It's also offering another $20 million, contingent on GlobalScholar meeting financial goals in 2011. The companies are part of M&F Worldwide Corp.

"There is a growing sense of urgency to provide solutions that will help bring a new level of excellence to education systems. Scantron and GlobalScholar's combined solutions will provide powerful tools for teachers, administrators and parents, in schools and districts of any size, as they work to improve the achievement levels for all students," Bill Hansen, president of Scantron and former U.S. deputy secretary of education, said in the release.

GlobalScholar's software for managing education - with digital gradebooks, analytics and tools for learning management and teacher development - is used by more than 1,000 school districts with a combined student population of more than 5 million.

The company employs 330 people in Bellevue and Chennai, India. That includes about 45 in Bellevue. No layoffs are expected and the company plans to expand in Bellevue next year, a spokeswoman said.

Kal Raman, GlobalScholar's chief executive, was formerly a senior vice president at Amazon.com and chief executive of Drugstore.com. He's staying with the company and will head the education group at GlobalScholar/Scantron.

Raman started Global cholar as InfiLearn in 2006, with backing from Ignition Partners, Michael Milken's Knowledge Universe and Microsoft vice president Peter Neupert, who worked with Raman at Drugstore.com.

The company changed its name to GlobalScholar in 2007, raised more than $42 million and bulked up through the 2008 acquisition of Colorado-based Excelsior Software.

It's the second exit this month for Ignition. The Bellevue-based venture firm also invested in Heroku, a San Francisco-based software tool company that Salesforce.com bought last week for $212 million.

SAN FRANCISCO -- Less than two years after it launched its mobile-social service, Foursquare has sorted out its product development system and grown to 40 employees.

The New York-based startup has 40 employees, 4 million users and $20 million in funding -- enough to make it until the end of 2011, co-founder and Chief Executive Dennis Crowley said at the Dive Into Mobile conference.

Crowley said the game mechanics the service is based upon -- rewarding users with virtual badges for checking into various places -- were initially "designed to keep people enthralled for maybe a month or so," to get users to join the company's social network.
"We didn't think it would blow up into what it is now," he told host Kara Swisher.

Now the company's looking into different game mechanics it can introduce and feeding its data to developers building their own applications, such as a service that sends e-mails when the mix of males to females at a bar or club tilts in the user's favor.

The company's also refining the tools it offers to enterprise customers such as Starbucks and Sports Authority.

"Under the hood it's like a stats engine," Crowley said.

Crowley said the company is also looking at ways to provide users with real-world rewards, creating a digital version of the bartender who recognizes regulars and gives a free drink or the restaurant owner who comes over to shake loyal customers' hands.

"There's an opportunity to reproduce some of that with software," he said.

Foursquare isn't profitable yet. Crowley said the company wants to first sort out how it's going to work with local merchants "and then pull levers" to start making money.

Crowley's probably not in a big rush. He sold his last company, Dodgeball, to Google in 2005.

Users will get 1 to 5 percent cash rebates on purchases made via the site, which includes a price comparison tool and coupons.

They have the option of sharing their purchases and information about deals and stores on Facebook. If friends click through the shared information and make a purchase, the user will get an additional 1 to 5 percent back.

OtherPage also provides icons that can be added to show "attitude and feeling" about products.

The service is launching with about 500 participating stores, including Best Buy, Overstock and drugstore.com. It also provides about 10,000 coupons and price comparisons for about 5 million products.

OtherPage won't see users' credit card numbers or address -- the purchasing is between the store and the user -- but the startup will see what's been purchased and where, if users opt to share that information.

Founder Kevin McCarthy previously started SearchMarketing.com, a retail search optimization business sold to ChannelAdvisor in 2005. He also worked at drugstore.com, Kiss.com and Atom Films.

Bellevue home-automation company Lagotek said it has hired Phil Herres as its new chief executive.

Herres joined Lagotek's board a year ago. He's taking the spot of Eugene Luskin, who will remain chairman of Lagotek and serve as chief technology officer of the 19-person company.

Herres studied electrical engineering at Gonzaga and received his MBA from the University of Oregon. He was chief operating officer of Aldus before it merged with Adobe. Later he was president of ST Labs, vice president of networking at Nortel and VP of Avanti Communications.

Also today, marketing company R2integrated announced that it hired former T-Mobile USA product development boss Leslie Grandy as executive vice president of its Seattle office. Grandy launched T-Mobile's G1 and six versions of the Sidekick before starting a consulting business, which will now be folded into R2i.

Earlier she was Apple's online store director for the Americas and a general manager of consumer marketing at RealNetworks.

Bellevue enterprise software startup Apptio is announcing today that it's hooked up with Wipro, the Indian tech giant.

Wipro will use Apptio's IT management system with hundreds of customers. In turn, Apptio will use Wipro consulting services to support its product suite.

"By combining Apptio's solution and Wipro's IT 360 framework, our customers can optimize the quality of their IT services, showcase the value IT delivers to the business and reduce costs," Wipro senior vice president, Deepak Jain Sr., said in the release.

It's a non-exclusive arrangement. Apptio's hoping to make similar partnerships with other companies, a spokeswoman said.

Apptio started in November 2007 and now has 105 employees and $37.5 million in funding.

The rank is based on percentage revenue growth from 2005 to 2009 for public and private companies.

Telanetix posted a whopping 27,276 percent growth during that period, increasing sales from $103,000 in 2005 to $28.3 million last year, according to Deloitte's report.

The company is run by McCaw Cellular veteran Doug Johnson, who joined in 2002 when it was known as AccessLine Communications, an early player in IP telephony. AccessLine merged in 2007 with San Diego-based Telanetix in a $34.9 million deal in 2007, and the combined company stayed in Bellevue.

Ranked first on Deloitte's list was Hughes Communications of Germantown, Md., which grew sales 164,079%, from $615,000 to $1 billion.

Two years after it was quietly started by veterans of Seattle's Qpass, online document handling startup Doxo is unveiling its service and opening it up to interested users.

Doxo is building a sort of secure online file cabinet for consumers to store and manage bills and documents such as bank statements and medical benefit statements. Consumers can use the service for free, while companies will pay Doxo to electronically deliver documents for a price less than paper mail.

The cost for companies using Doxo instead of mail varies, but the company is pitching itself as a way for them to save more than 80 percent of the cost of paper mail.

On the site, essential information - such as a bill's due date and amount - are displayed for consumers, along with a button to click and display a PDF version of the original document. Documents can be exported from the site and printed or saved to a computer.

Starting Wednesday, Doxo is launching its consumer service on an invitation basis, meaning that people can submit their name to Doxo and it will dole out access as it ramps up the service.

Doxo raised $5.25 million from Mohr Davidow Ventures and Bezos Expeditions, the personal investment company of Amazon.com founder Jeff Bezos.

Seattle recruiting software company TalentSpring is disclosing details of its sale today, a few weeks after founder Bryan Starbuck said a deal had taken place.

The 10-person company was acquired by Vancouver, B.C.-based Talent Technology, which is using the deal to establish a Seattle office where Starbuck will be vice president of product management. He said the remaining employees also joined Talent Technology.

Starbuck, a former Microsoft engineer and manager, started TalentSpring in 2007 and raised $2.7 million from investors, including Second Avenue Partners.

Two high-profile Seattle tech investors are starting a new social game company called "King of the Web" that will launch in December.

The company is being started by Nick Hanauer, an early investor in Amazon.com and founder of aQuantive, and Rich Barton, the former Expedia chief executive and co-founder of Zillow.

Hanauer confirmed the venture but provided few details, saying the company will come out later this year.

"We're sort of in development mode right now and we'll launch in December," he said. "Rich and I think it's a really really cool idea. The space is really big and growing fast."

Social games -- including multiplayer games played via social networks such as Facebook -- are a big business with hundreds of millions of players. Business hits include Zynga, which raised $520 million, and Playdom, which was sold to Disney for $563 million in July.

Google and Apple are also working to build up games on their desktop, tablet and mobile platforms.

Hanauer said there's still more opportunity for new social-game companies.

"Great content which entertains will for a very long time be a growth industry on the Internet," he said. "We think we have an idea that can create some really really great content."

The company is being started with a group of veterans from aQuantive, he said.

"It's definitely an idea where if it works it will be huge," he said. "It's a big idea."

Nice scoop -- if it's true -- by GigaOM: AOL is close to buying TechCrunch. An excerpt:

The deal is at a sensitive stage and might fall apart yet, but I don't think so. Sources familiar with both entities says that the announcement is likely to come onstage at Disrupt, TechCrunch's flagship conference currently underway in San Francisco.

There's been speculation that TechCrunch was on the block since founder Michael Arrington announced in May that he had moved to Seattle. Not only is the city closer to his parents in the Anacortes area, it's also in a state that doesn't have an income tax, for the time being.

An unusual new game venture called Spry Fox launched this week in Juanita, aiming to bring a Hollywood-style business approach to the online, Flash games industry.

Founders David Edery and Daniel Cook formerly worked at Microsoft, where Edery was portfolio manager of Xbox Live Arcade and Cook was a game designer.

Instead of raising money and building a big studio, they're operating Spry Fox more like a movie studio, assembling temporary teams for individual game projects and sharing the proceeds with the team.

Spry Fox has five games in development with partners in Seattle, the San Francisco area, Australia and Vancouver, B.C. They range from individual developers to small game startups, all drawing on the expertise and connections of Edery and Cook. It's a distributed company, but a hub is Edery's home in Juanita.

Eventually Spry Fox could also provide funding to the teams it works with but for now they're all self-funded.

Edery, who ran a consulting business after leaving Microsoft in 2008, said Spry Fox games - including a new version of the steampunk flying game Steambirds - will appear on Apple and Android devices. But the company's primary focus is downloadable games based on Adobe Flash and distributed through game portals such as Kongregate.

That market appears saturated, but Edery said there's still opportunity for quality games such as Steambirds, which has been played by more than 10 million people. If a Flash game hooks players and lead to microtransactions and subscriptions, there's the potential for the title to generate millions of dollars in a month, he said.

Apple's platform is an interesting opportunity but it doesn't come close to the market share of Flash, which is running on a billion browsers worldwide, Edery said.

The key discovery was figuring out how to use the copper wiring inside a house as an antenna to transmit information from the sensors, which could be used by medical devices or home automation systems.

A prototype placed within 10 to 15 feet of electrical wiring is able to send data to a base station plugged anywhere in the home. Testing in a 3,000-square-foot home found only 5 percent of the house was out of the system's range.

Patel said that power consumption has held back the use of sensors in the home. But the antenna system could enable the sensors to run effectively forever on a single battery -- perhaps 50 years.

"Basically the battery will start to decompose before it runs out of power," he said in the release.

Patel's previous venture, a company called Zensi developing energy monitoring systems, was sold to Belkin in April.

Proceeds from that deal are providing seed funding for the new company, which doesn't yet have a name. Patel, 28, said the company will be based in Seattle and run by others. He wants to continue teaching.

In this UW photo by Gabe Cohn, wiring wrapped around the sensor acts as a broadcast antenna while the household wiring serves as the receiving antenna.

Zillow.com co-founder Rich Barton is stepping down as chief executive of the 5-year-old real estate website, which is positioning itself for an initial public offering when conditions are right.

Spencer Rascoff, Zillow's chief operating officer (left), is taking the top job at the Seattle-based venture.
Zillow simultaneously is announcing that the company is now profitable. It drew 12.5 million unique viewers in August, up 41 percent over August 2009, and its online mortgage quote service is up sixfold, with 314,000 loan requests last month.

Barton said the company doesn't need to raise any more money. Investors have put $87 million into the business, which now has about 200 employees.

"We're profitable now and we have plenty of money in the bank," Barton said. "We could see at some point raising money through an IPO, which would be a desirable event for all of us."

Zillow co-founder Lloyd Frink is also moving, from president to a new fulltime position as chief strategy officer.

Barton, who helped start Expedia within Microsoft and became its chief executive, went on to become a Web entrepreneur and venture capitalist. He'll continue as executive chairman of Zillow's board.

The move frees up Barton, 43, to spend more time on a few other company's he started recently, including travel site TravelPost. Barton said he'll continue to spend at least half of his time with the company.

Rascoff was groomed for the position and has lately been Zillow's highest profile executive.

Looking forward, Rascoff said Zillow's primary goals are to keep extending its reach and brand, grow revenues and build up its mortgage market business. The IPO is still a ways off, but not out of mind.
"We'd like to go public. We'd like to be public at some point. We intend to be public at some point," he said, definitively answering the question repeatedly asked about Zillow's future.

Rascoff, 34, is also a veteran of Expedia, where he was a vice president before joining Zillow in 2005. He joined Expedia after its parent company at the time, IAC, bought the company he co-founded -- Hotwire.com -- for $675 million in 2003. Earlier, the Harvard grad worked at Goldman Sachs and other investment companies.

Barton (left) said the transition has "been part of the plans since I first met Spencer. When I interviewed him it was my hope that he would be CEO someday."

After a rocky start last year, Bellevue game startup Smith & Tinker is overhauling its online game platform for young boys.

The company stopped making handheld devices to play its "Nanovor" action-collecting game offline and instead is focusing on browser-based gaming and gaming on Apple devices and Facebook.

It also announced a major licensing agreement with Disney's Marvel portfolio for games that will appear starting in the second quarter 2011. The new Nanovor game is appearing this fall, and versions for Apple iOS devices are planned for the fourth quarter.

"We're in a fairly good place from a development standpoint at this point and our existing investors are continuing to be supportive of us," said co-founder Joe Lawandus, who was earlier vice president and general manager of Disney Toys & Sporting Goods.

Smith & Tinker launched Nanovor with a major promotional campaign and retail presence last holiday season, using $29 million raised from Paul Allen and other investors.

The smaller team was still able to re-create the Nanovor game with new 3-D graphics and social networking features in a lighter software package that runs in browsers, without the download client the game originally required.

The sci-fi game is aimed at pre-teen boys, who can buy collectible characters and then upgrade them with achievements earned by playing games on the site.

The underlying platform will now be used to support games using Marvel comic-book characters. Those games will aim for a broader range of players and be playable on Facebook, as well as in browsers and on Apple mobile devices.

Co-founder Jordan Weisman, a former creative director at Microsoft's games business, said the plan was to eventually use the platform for characters developed outside the company.

"It's always been in the back of our heads," he said. "Whenever you do a bunch of innovation, one of the things you look at is how can you exploit that innovation and investment over more franchises."

Lawandus said the company's planning to raise more money this year -- under $10 million -- to carry it through to profitability.

Marcelo Calbucci, a former Microsoft developer turned startup impresario, has found a new job.

He announced today that he's now "chief startup officer" at Conceivian, a Redmond "startup lab" that's building and operating startups. Led by veterans of Microsoft and other large tech companies, the venture is working with seven startups and hopes to bring 100 to market over the next 10 years.

Calbucci ran a family-oriented social networking service called Sampa from 2007 to 2009 and started the Seattle 2.0 news site for Web startups.

Last year Calbucci began working on an idea for a consumer product but couldn't get funding and shelved the project in April. After he updated his LinkedIn profile, Conceivian Chief Executive Saqib Rasool approached him in June and Calbucci joined in August.

In his announcement, Calbucci said he's "very excited about the opportunity in helping investors and entrepreneurs to make their business a reality."

Cequint provides carrier-grade caller ID products and services to mobile phone companies. It's expected to add $2 million in revenue to TNS earnings through the end of 2010.

The purchase was $50 million -- $46.7 million in cash plus about $3.3 million in TNS stock for Cequint executives. Another $62.5 million in cash will be paid if performance targets are met, for a potential total of $112.5 million.

A spokesman said all of Cequint's nearly 70 employees will keep their jobs and the company will remain based in Seattle, operating as a TNS subsidiary.

More than 30 million phones have been distributed with Cequint's first product, City ID, which displays the city and state of incoming numbers. The release said the company's moving to a new version that also delivers the caller's name and other features.

Seattle enterprise software vendor Apptio raised a whopping $16.5 million in a third round of funding that positions the company to pursue a public offering next.

Apptio will use the funding to push into new markets and generally grow its business. It plans to add 30 employees by the end of the year, after hiring 30 since January. It currently has 85 employees.

The series C round brings Apptio's funding to $37.5 million. The round was led by Shasta Ventures, with participation from current Apptio investors, including Andreesen Horowitz, Greylock Partners and Madrona Venture Group.

Apptio makes tools that enterprise technology managers use to monitor, analyze and report on their operations and spending.

In its funding announcement, Apptio said it has seen a 300 percent increase in bookings year-over-year, doubling the number of Fortune 1000 companies using its products. Customers include Alaska Airlines, Blue Cross Blue Shield, BNP Paribas, Cisco, Expedia, Hallmark, Starbucks and JPMorgan Chase.

"We are operating with a very strong cash position, but still received high interest from outside investors which ultimately influenced the timing of this financing round," Sunny Gupta, co-founder, president and chief executive, said in the release.

A spokeswoman said the company has no specific plans for an IPO at this time, but provided the following statement:

We do not anticipate taking another round of funding. We are managing the company in a way that builds shareholder value. Given our belief in the market opportunity and the capital we have to fund our growth, we believe we have a good shot at a very successful IPO.

Apptio could also become a target for acquisition by one of the major enterprise software companies building up their portfolios. Gupta sold his previous startup, iConclude, in 2007 for $60 million.

A quick update from Marc Barros, chief executive at Countour, the Seattle camcorder maker formerly known as VHoldR.

The company changed its name at the end of July, taking the moniker of its Contour wearable camcorders.

Barros said the 40-person company plans to triple its business this year. It's among a handful of Washington companies appearing on the new Inc 500 list of the fastest-growing companies in the country, appearing at 183.

After four years and several overhauls of its business strategy, Seattle startup Delve Networks was sold today to Limelight Networks, an Arizona-based content delivery network.

The price was undisclosed but one report - based on unnamed sources - pegged it at $10 million, a notch above the roughly $7 milion that Delve had raised from investors.

"I'm certainly very happy," said Delve Chief Executive Alex Castro, a veteran of Microsoft and Amazon.com.

Castro's company started as a podcasting venture called Pluggd and, after a name change in 2008, morphed into a video delivery platform for Web publishers.

Delve's grown to 20 employees and 120 customers, up from fewer than 20 customers in early 2009.

Castro said he'd been talking to a number of suitors before the deal was reached with Limelight. "We were having conversations with a lot of folks, we had multiple people interested, multiple people who made offers," he said.

Delve was at a point where it needed to either make a big investment in a bigger sales team or hook up with a company like Limelight, which already has the reach.

"We've been growing rapidly," he said. "To keep up that pace we would have had to build out a much larger sales organization."

Limelight's going to add Delve to the stack of technology it offers customers - including Castro's former employers in the Seattle area.

The deal comes as online video service providers have begun consolidating, but it's also part of Limelight's effort to build up its technology team and presence in Seattle. It already had some technical people and sales reps supporting customers here but Delve is its first full Seattle office, according to Paul Alfieri, marketing vice president.

Alfieri said Limelight bought Delve as much for the people as its products.

"At the end of the day the talent of the engineers and the resumes and the experience are actually what make acquisitions like this work," he said.

The company is expected to continue expanding in Seattle in the coming year but Castro wouldn't specify the plans.

"This is about growth," he said of the deal. "We're not closing the office, we're not moving, we're not getting rid of folks."

Alfieri said more details about the acquisition may be disclosed around the time Limelight reports its earnings on Aug. 5.

Service in Seattle will start with a basic $4.99 per month plan offering local broadcast channels in high definition, a library of on-demand movies and cable shows, and access to YouTube and other Web video shows.

To use the service, you've got to buy the hardware - including a receiver and a DVR with 1 terabyte of capacity shown here - for $150. There are no equipment rental fees.

In other markets, Sezmi offers a premium plan for $19 that includes access to 15 cable channels but not ESPN, Food Network or HGTV. A spokeswoman said the premium service should be available in Seattle at the end of the year or the start of 2011 and the company's working to expand the cable lineup.

Sezmi, based in Belmont, Calif., raised $75 million since it was started in 2006. It launched its service earlier this year in Los Angeles.

Seattle's part of an expansion push that's extending Sezmi from 15 to 36 markets on Aug. 2.

Five startups are presenting today at the state Technology Alliance's Innovation Showcase, an event intended to connect more early stage companies with investors.

Half the companies that have presented originated at the University of Washington, probably because the school's more aware of the program, said Linden Rhoads, the school's vice provost for commercialization.

Here's a rundown of their presentations.

Assay Dynamics: An automated medical testing platform with a special card to analyze fluids and run multiple tests simultaneously on the same fluid sample. A key innovation is that the machines automatically calibrate every time they're used.

"What we're trying to do is allow physicians to do more and more testing in their office," founder Kjell Nelson said.

Picnik's online photo editing tools are now offered from within Picasa Web Albums. Also linked are the account systems, so Picasa recognizes people who paid for premium versions of Picnik.

Picnik founder Jonathan Sposato, who now works across town in Google's Fremont office, explained the changes to ReadWriteWeb.com, which surmised that more Picnik tools are coming to Google properties. Sposato told the site that that last few months have been spent mostly shifting Picnik to Google's infrastructure, from Picnik's own servers and Amazon's S3 service.

Data isn't the only thing that Tableau Software is visualizing. It's also seeing crazy growth.

The data visualization company, headquartered in the Fremont neighborhood, today is announcing that its sales grew 106 percent from the first half of 2009 to the first half of 2010, and it's going on a hiring spree to double its team.

Tableau is privately held but disclosed that it grossed more than $20 million last year and is adding new clients daily to a list that has 5,000 customers, from Apple to Zynga.

It employs 136, up from 100 at the start of the year, and plans to fill 100 new positions in the next 12 to 18 months. That's more than double the pace of hiring that Chief Executive Christian Chabot expected in April, when he launched a free online version of the company's visualization toolbox.

Today is a big day in Woot history. This morning, I woke up to find Jeff Bezos the Mighty had seized our magic sword. Using the Arthurian model as a corporate structure was something our CFO had warned against from the very beginning, but now that's water under the bridge. What is important is that our company is on the verge of becoming a part of the Amazon.com dynasty. And our plans for Grail.Woot are on indefinite hold.

Woot will remain autonomous and based in the Dallas area, according to Amazon.com. The purchase price isn't being disclosed and the deal should close in the third quarter.

"The acquisition will foster the long-term growth of Woot, allowing it to continue its passion for serving customers with low prices across a broad selection of products," spokesman Craig Berman said via email.

In addition to gadgets offered through Woot.com, Woot sells wine, toys and clothes through companion sites.

Rutledge provided a more expansive explanation of the deal:

Amazon is interested in us because they recognize the value of our people, our brand, and our unique style of deep-tissue, toxin-releasing massage. And they don't want to start changing things now. Amazon's hoping our nutty Woot steez continues to grow and develop (and perhaps even rubs off on them a little). They're not looking to have their folks come in and run Woot unless we ask them to, which incidentally you can do by turning off the bathroom lights and saying the word "Kindle" three times; a helpful Amazon employee will appear in the mirror. That said, Amazon clearly knows what they're doing in a lot of areas, so we're geeked about the opportunities to tap into that knowledge and those resources, especially on the technology side. This is about making the Woot brand, culture, and business even stronger than it is today, and we expect that any changes will be for the better or we wouldn't bother with this endless paperwork.

Better yet is the video in which Woot sings the news: "When we heard we were like 'that's some kind of scamazon' but it's true, we got acquired by aaamazon ... we're hooking up with the notorious crew."

The move -- being announced Wednesday -- frees up founder Ben Huh, 32, to focus on recruiting developers, tuning business operations and pursuing more partnerships for a network of Web sites that's become one of the world's biggest online humor companies.

"After three years of being stressed out I'd like to take a day off or two," he said.

Chan had worked with the company before through CFO Selections, where she also worked with Picnik just before it was sold to Google.

So is Chan cleaning up the Cheezburger finances prior to a sale?

"No, not at all, no such plan in the works," Huh said.

The company "recognized we need a little bit more structure," he explained.

Cheezburger has grown to 45 people and is recruiting more editorial staff and developers to work on its internal tools, including a proprietary system for handling and publishing user-generated content. It recently expanded into additional offices on Lower Queen Anne and Huh's mulling whether to open satellites in Los Angeles and New York.

Cheezburger operates more than 50 humor sites, including its flagship I Can Has Cheezburger, that together generate 340 million page views and 110 million views per month.

Huh said the company continues to be profitable, but it should be generating more revenue from its traffic, which is another thing he's going to focus on now that he's built up an executive team.

The big question for fans, though, is whether Huh will be any less funny now that he's hired more managers to take some pressure off.

Fear not -- there's a new kind of angst to milk for inspiration.

"As I take my hands off more day-to-day operations there's a little bit of feeling of helplessness," he said. "There is definitely a feeling of 'I'm not sure what's going on over there.' "

Seattle enterpreneur Hadi Partovi, who consults with Facebook and a number of other Web ventures, is touching a different kind of technology company.

Partovi is joining the board of Taser, the Scottsdale, Ariz.-based manufacturer of "personal protection devices."

Believe it or not, Taser's expanding into social media and software, where Partov, a former general manager at MSN, has lots of experience.

From the release issued by Taser:

"Mr. Partovi's extensive experience as an expert in development, software solutions and social media technology will provide added experience as well as a strategic focus to roll out our emerging innovative Evidence.com and Protector driver and mobile technology," Taser Chairman Tom Smith said. "Mr. Partovi is a highly experienced and valuable addition to our board. He will provide insight in our new pioneering technology solutions that provide law enforcement and families with peace of mind with products that protect life as well as the truth."

Seattle online directory service WhitePages.com unveiled a big upgrade to its business search today, aiming to offer simplified search results for people looking for nearby businesses and stores.

The company's drawing on a database of 15 million business directory listings and 1 million store locations in the U.S. It's also adding social features for sharing business listings by email or text messages, and the ability to directly save them to Outlook.

It also begins the searches with a guess about the searcher's location based on IP address, so my search for "Starbucks stores" showed 118 nearby in the downtown Seattle area. A similar Google search returned the location of a Starbucks in North Bend.

A Starbucks store search at WhitePages.com:

A similar search at Google:

WhitePages may the easiest option for some business searches, if you're just looking for the phone number or address of a particular business, for instance. But it's a pretty dynamic space, with Google, Bing and others are putting more effort into local business services.

Even WhitePages' business search is evolving. When I did a search for "Seattle Times," the site and accompanying Bing map said the company's in the location of a defunct newspaper along Elliott Way. It actually provided 14 listings for the Times, none of which was shown at its actual location:

A group of engineers who helped create Amazon.com's Elastic Compute Cloud service announced plans today to build a new cloud operating system that could compete with offerings from Microsoft and IBM.

Their company, Nimbula, is based in Menlo Park, Calif.. It has 17 employees and $5.75 million in funding from Sequoia Capital and VMWare.

Chris Pinkham, co-founder and chief executive (below), said Nimbula doesn't compete with his former employer and will actually be "an on ramp for EC2."

"We don't think this is directly competitive," he said. "We think this is complementary.''

Nimbula is developing software that runs within a company's network and directs where applications are run -- in-house or on various cloud services -- based on policies created by administrators. It's installed on top of an open-source hypervisor, and pitched as a way for companies to maintain the security of their information while taking advantage of cloud computing where appropriate.

The software is being tested by a set of unidentified companies in the finance, technology and healthcare fields. A beta version launches next quarter and it will be generally available in Q4.

Pinkham was vice president of Amazon's global infrastructure before managing development of EC2. To be closer to family, he left Seattle in 2005 for his native Cape Town, South Africa, where he set up an Amazon engineering office. He left the company in 2006, shortly before EC2 launched, and then started Nimbula in 2009.

Co-founder Willem van Biljon worked on EC2 product management and marketing. Nimbula's sales vice president, Martin Buhr, previously did EC2 business development and sales and before that worked at Microsoft.

"As the team leaders behind EC2, no one has a greater understanding of this emerging architecture and how to adapt it to enable large organizations to fully benefit from the co-existence of public and private cloud services," Sequoia general partner Roelof Botha said in a release.

Perhaps Botha's also enthusiastic because he, Pinkham and van Biljon all graduated from the University of Cape Town -- as did VMWare Chief Executive Paul Maritz.

Hewlett-Packard confirmed this afternoon that it bought Melodeo, a 7-year-old Seattle media company that streams customers' music collections to various devices.

HP isn't disclosing the purchase price, but Melodeo's investors had put more than $19 million into the company. That includes $7.9 million from Voyager Capital and Ignition Patners in 2007 to fund Melodeo's nuTsie streaming service.

Earlier today TechCrunch said an anonymous source valued the deal at $30 million to $35 million.

Melodeo was started by founders of Tegic Communications, creator of the T9 predictive-text system for mobile phones. Tegic was sold to AOL in 1999 for $350 million in stock.

Mangalindan's statement said HP is "excited about the potential of this technology to bring the power of cloud-based delivery services to millions of customers."

"Melodeo is one of the only companies which possess the technology to aggregate a consumer's digital media, manage it in the cloud and stream it to the user on any device, along with additional streams of content. HP is always on the lookout for interesting innovative technology, especially as it develops its cloud-based offerings," she said via e-mail.

HP has already built a great application for streaming consumers' digital media to mobile devices, called iStream, but it's based on Windows Home Server and connects to Apple iPhones, iPads and iPod Touch devices.

Maybe it wants a purely HP stack of consumer software, based on the WebOS it received through its acquisition of Palm. I wonder if it considered Rhapsody.

Although HP's deal has been characterized as a showdown with Apple's iTunes, it also seems like more evidence of HP's frayed relationship with Microsoft, which has its own cloud music service in Zune.

RANCHO PALOS VERDES, Calif. -- A few weeks ahead of its launch, the OnLive online gaming service was demonstrated at the All Things Digital conference by founder Steve Perlman.

Using a new compression technology, the service delivers console-type games that run on the company's datacenter and are played through a small software client downloaded to a PC by players. Perlman demonstrated the service running the game "Borderlands" on an iPad and iPhone, but it didn't work on the phone.

Later in the year it will sell a adapter about the size of an iPod for displaying and playing games on a TV. It may eventually be used for streaming movies as well.

"This is cloud computing in the purest sense of the world ... it's the thinnest of clients," Perlman said.

You could say that OnLive's seed capital came from Microsoft. Perlman earlier sold WebTV to Microsoft and Moxi to Paul Allen.

OnLive was unveiled in March 2009 and is launching its service June 17 at the E3 gaming conference in Los Angeles. Prices will be disclosed then, but Perlman said the service will cost less than $14 per month.

Perlman said the games can be played without lag by people who live within 1,000 miles of OnLive's servers, which so far are located in Silicon Valley, Dallas and the Washington, D.C. area.

Glaser will mremain in Seattle, where he'll look for promising investments in the Northwest for Accel and commute as needed to Palo Alto. He's particularly interested in the intersection of mobile and social companies, and will work as an adviser to existing Accel companies, a spokeswoman said.

Accel was an early backer of Real, investing in the company in 1995.

"Rob's extensive experience as a digital and social media pioneer should prove to be an asset for Accel's renowned and growing technology portfolio," Accel Managing Partner Jim Breyer said in a press release.

In other VC news, Voyager Capital partner Geoff Entress has joined Seattle's Founders Co-op as general partner. He'll stay with Voyager while helping Founders founders Andy Sack and Chris DeVore lead the seed-stage venture fund they started in 2008.

Los Angeles-based advertising infrastructure company The Rubicon Project bought another Seattle startup -- Web security services provider SiteScout -- that will form the nucleus of a new Rubicon office in Pioneer Square.

Rubicon, which has $42 million in funding and processes 45 billion online ads a month, made its first acquisition last September when it bought Seattle's Others Online, an "audience optimization" venture.

The company is now planning to combine the three Others Online employees -- who have been working from their homes and commuting to L.A. -- with SiteScout's office, creating a seven-person satellite office.

SiteScout Chief Executive Rob Lipschutz is becoming a Rubicon vice president and will manage the Seattle office, which plans to hire additional engineers over the next two quarters.

SiteScout was formed in 2006 and offers malware monitoring and removal tools to Web publishers.

The deal is being announced today. SiteScout's sale price wasn't disclosed.

WebM is intended to offer a royalty-free alternative to commercial video standards -- namely the H.264 codec that's widely used for Web video today and favored by Apple.

Microsoft said its upcoming Internet Explorer 9 browser will support WebM's "VP8" video codec, as will Mozilla's Firefox, Opera and Google's Chrome browser.

The jumble of video standards and jousting between platform companies is confusing to consumers but good for companies like Delve.

After a few different approaches to the video market, Delve has a growing business converting Web publishers' video to multiple standards for different devices. today it jumped on the WebM bandwagon, announcing its support of the standard.

In an interview, Chief Executive Alex Castro, a veteran of Microsoft and Amazon.com, also offered some insights on WebM and what's happening with Web video standards.

Castro is enthusiastic about WebM but expects it will take awhile to get established.

"It's sort of like HTML 5 -- it's not going to change the world in the next six months, but in 18 months it could have a big effect," he said.

With "the combination of this new WebM format along with a lot of people getting behind HTML 5, you start to say, 'Why do I care about Flash and Silverlight?' " he said.

Castro said the complexity of the situation helps Delve, which has also benefited from the format spat between Apple and Adobe. The fight has generated business with publishers needing their video converted to play on the iPad.

"The only way you can play video on the iPad is to support HTML5 and H.264," he explained. "Our customers ... they don't care about the standard politics, they care about 'can my customers watch my content.'"

How will consumers be affected by the video standards battles?

"Unfortunately in the near term there's going to be some confusion for users and some poor experiences," Castro predicted.

"I think unfortunately consumers are caught in the middle as all these major technology vendors are vying for the highest ground," he said. "Right now consumers are getting the shortest end of the stick. If I spend $500 or $700 for an iPad, it kind of sucks a lot of Web sites I go to don't have support for HTML5."

Does Google have enough clout to establish the WebM standard?

"They have YouTube and that's great, but what they don't have is enough browser market share to do it by themselves," he said. "That's why they need Opera and Mozilla, but even if you add those guys up they don't have 50 percent market share. In some ways it would be good for consumers today if Google had the oomph to make this a standard. As soon as someone wins, the sooner consumers aren't caught in the middle."

"I think the sad reality here is this is probably going to play out for another year or two while these guys jockey for position."

Meanwhile, Delve's doing fine, Castro said. He said its sales grew 400 percent last year -- to more than $1 million -- and he's expecting around 290 percent sales growth this year.

A few billionaire techies are putting money into Seattle's Qliance Medical Management, a company experimenting with direct-pay medical clinics that operate outside the usual medical insurance system.

The company is announcing that it raised $6 million from Amazon.com founder Jeff Bezos, computer baron Michael Dell and Drew Carey, the comedian, actor and co-owner of the Seattle Sounders.

Also pitching in are Second Avenue Partners, New Atlantic Ventures and Clear Fir Partners. The firms invested earlier in the 4-year-old company, which has now received $13.5 million and runs three clinics in the Seattle area.

Chief Executive Norm Wu said the company wasn't looking for backers that are household names. It's in the process of raising a much larger amount to fund a national expansion, but Bezos, Dell and Carey heard through the grapevine about the company and wanted to get involved.

Wu said he used to work as a consultant for Dell in the late 1980s, and Bezos and Carey heard from other Qliance investors.

"This is a stepping stone,'' he said. "What we're particularly happy about is we've got people who've been very successful developing transformative business models who can immediately relate to what we're doing.''

Qliance plans to use the money to keep growing in Washington state, where Wu expects to double employment from its current 60 people over the next year, and to develop the company's technology platform. It operates clinics in Kent, Mercer Island and downtown Seattle and is considering new locations on the Eastside, in North Seattle and in Eastern Washington.

The national expansion should begin with a clinic in California next year. Wu said Qliance has been especially encouraged to expand by unions that are large purchasers of healthcare for their members.

UPDATE: I heard from a former Qliance subscriber concerned because she had been billed more than the $44 to $84 range the company provided in its press release. It turns out there's also a higher tier of services that costs up to $129 per month.

Here's an excerpt of the explanation I received from a spokeswoman today:

Qliance has two levels of service - Qliance Level I and Qliance Level II. The core service level (Qliance Level I) ranges from $44 to $84 a month.

The Level II service also includes bedside hospital coordination (your doctor will visit you and make regular rounds at the hospital if you're there for a short or extended stay) as well as after hours access to your specific provider (whereas the Qliance Level I after-hours access coverage is shared among all Qliance providers). Level II costs max out at $129/month for seniors.

-- Seattle mobile media analysis firm Ground Truth raised $7 million from Emergence Capital Partners and Openair Ventures, plus its previous investors, Steamboat Ventures and Voyager Capital. The 20-person company, led by former Qpass President Sterling Wilson, has raised $9.6 million. Its service launched in January.

-- Optimum Energy, a Seattle heating, ventilating and air conditioning software company, today launched a Web-based system for managing commercial HVAC systems. It's a companion to Optimum's networked system that it claims will reduce energy consumption by 30 to 60 percent.

-- Google's going to call out the success of Bellevue online project management company Smartsheet, highlighting its success on Google's business application marketplace. Smartsheet's leads spiked after it appeared on Google's Apps Marketplace, according to Chairman Brent Frei, a veteran of Microsoft and Onyx. Frei said the results will be touted on the Google Apps Developer Blog (and on Frei's own blog ...).

Frei said business has been "extremely good" since January with paying customers growing 17 percent month over month. Smartsheet launched in both Google's marketplace and Intuit Workplace, and Google's now one of its four primary sales channels.

The sale today of Zensi, an Atlanta energy monitoring startup, will benefit the University of Washington directly and indirectly.

Zensi was co-founded three years ago by a UW assistant professor, Shwetak Patel, while he was a grad student at the Georgia Institute of Technology. Patel stayed involved remotely after he joined the UW engineering faculty in late 2008.

The 10-person startup today announced that it was acquired for an undisclosed amount by consumer electronics manufacturer Belkin.

Zensi drew on research from the UW and Georgia Tech into online monitoring of home electricity and water consumption. The schools will receive licensing royalties from Belkin as part of the deal.

Patel will continue advising the company, while teaching UW students in a program that emphasizes turning research into practical projects. He now has another case study.

"It only took me about three years to go from research to a real product,'' he said today.

Selling to Belkin expedites the process of getting to market, Patel said. Zensi was considering taking venture capital and developing products itself, but that would have taken several more years. Belkin is incorporating the technology into a line of "Conserve" energy management products that's being expanded later this year.

Last year, the same research put Patel, 28, on Technology Review's list of standout young technologists.

Patel is mulling another venture in the healthcare monitoring space, but first he'll take a little break from startups.

MySpace has no plans to cut its 70-person Seattle engineering office following the departure of Hadi Partovi, its Seattle-based senior vice president of technology.

A MySpace spokeswoman said today that the Los Angeles company is "committed to the Seattle office," where several engineering leads remain.

Partovi and his brother, Ali Partovi, are both leaving MySpace on Friday, though San Francisco-based Ali will continue consulting with the company. They both joined in September 2009, after MySpace acquired their social music startup iLike. Word of their departure first surfaced on the TechCrunch and BoomTown blogs.

The iLike sale was reportedly for around $20 million, including $6 million to $8 million in retention payouts that will apparently be partly sacrificed by leaving midway through the first year.

Another iLike co-founder, Nat Brown, is staying with MySpace as vice president of technology in Seattle working on mobile products.

Hadi Partovi, a former general manager of Microsoft's MSN.com, will remain active in the tech business in Seattle and beyond.

According to a statement released by MySpace, he plans to continue advising and investing in startups, including Seattle's BlueKai. He's also interested in working with education ventures (perhaps DreamBox Learning?).

The statement said Partovi "is leaving to pursue other opportunities. In addition to continuing his work as an advisor and angel investor to various startups, he will be following his passion for education by working directly with technology focused non-profits. Hadi leaves as a valued friend to the company, and we wish him the best of luck in his future endeavors. Ali Partovi will be stepping down as SVP of Business Development, but will continue working with MySpace as a strategic advisor working on special projects. He will also be taking time to invest in and advise startups."

Perhaps Partovi should start an investment fund.

Before starting iLike, he co-founded Tellme Networks, a telecom company sold to Microsoft for $800 million in 2007.

Along the way, he was an early investor or adviser in a series of home runs, including Facebook, Zappos (which was bought by Amazon.com), LinkExchange (bought by Microsoft), IronPort (Cisco), XL2Web (Google) and Edusoft (Houghton Mifflin).

Companies he's now involved with, in addition to BlueKai, include San Francisco's DropBox and OPower, a Washington, D.C.-based energy software company.

After graduating from college, Hastings taught 9th grade math, he explained during a phone interview today. He remembers the challenge of having to figure out a lesson plan for a class with kids at varying levels.

"I never knew what lesson to present to which group of kids," he said. "What this software does is really adapt to put the right lesson in front of each kid at their level. That's why it's really personal for me."

Although Hastings has connections to the Bellevue area -- he's on Microsoft's board of directors -- he discovered DreamBox by chance while visiting a school in San Jose, Calif. A class was using the software and he was "wowed by how kids were engaged because it has some entertainment built into it."

Hastings called to see if DreamBox was open to an investment.

"I got so excited I ended up acquiirng the company,'' he said. "I think it's just got tremendous potential."

In addition to the purchase price, which wasn't disclosed, Hastings and the Charter Fund investment group are investing $10 million to grow DreamBox.

"We'll go in a mode of some significant hiring now," Hastings said.

The vision is that 10 years from now, laptops will be so cheap that every student will have one. Software like DreamBox could then become a core part of class, instead of a supplement used in a lab before or after school.

Asked about DreamBox being a subscription business like Los Gatos, Calif.-based Netflix, Hastings said he's "learned some things from Netflix" about licensing content like movies and TV shows, but DreamBox creates original content.

The business opportunity isn't so much direct to consumers, like Netflix, as it is an enterprise play selling material to schools for classroom use.

So Hastings doesn't plan to stream DreamBox math learning games to the Xbox, PlayStation and Wii?

Online education startup DreamBox has been sold to Netflix Chief Executive Reed Hastings and a non-profit venture fund, Hastings announced an education conference in Arizona today.

Hastings has had pretty good luck selling monthly subscriptions for video entertainment.

I wonder if he plans to use Bellevue-based DreamBox -- which provides online math education programs for a monthly fee -- to build an educational equivalent. Maybe parents could someday click a box on their Netflix bill to stream educational games and tests, as well as movies.

The sale price wasn't disclosed but the investors said they're putting an additional $10 million in "to expedite the company's aggressive growth strategy to significantly increase its footprint in U.S. schools with the development of new e-Learning content across a variety of core disciplines, as well as ongoing technology advancements to the DreamBox Learning Platform."

Dreambox was started in 2006 by former Microsoft executive Ben Slivka and Lou Gray, former president of UIEvolution. They launched it with $7.1 million from angel investors and began selling its $13-a-month elementary education program last year, with the initial offerings aimed at kindergarteners through 3rd graders.

Both Slivka and Gray have now stepped aside. Hastings took on Slivka's role as chairman, and the investors are going to search for a chief executive to replace Gray. Meanwhile DreamBox will be led by the remaining executives - Sarah Daniels, marketing vice president, and Daniel Kerns, vice president of product development.

DreamBox has 18 employees and will remain in Bellevue, a spokeswoman said.

Hastings -- who is also a Microsoft board member -- said his goal is "to fuel the movement of e-Learning and help millions of students."

"I have evaluated many companies in the K-12 e-learning marketplace and DreamBox Learning clearly stood out," he said. "They have already shown strong results in a short period of time, and the DreamBox Learning Platform has the best underlying adaptive technology, giving every student the opportunity to thrive through innovative online learning," Hastings said in a release.

The other investor, Broomfield, Colo.-based Charter School Growth Fund, is led by Kevin Hall, a co-founder of charter school operator Chancellor Beacon Academies.

Seattle has to have a few contenders for a new contest Nokia is running. It's offering a $1 million investment in the best mobile business idea submitted to its Growth Economy Venture Challenge.

That's a lot of Finnish cheese for a phone app.

But it can't be another mobile game or Twitter client -- Nokia wants to hear from people thinking globally. It's looking for:

-- An idea that could truly change the way people use Nokia mobile devices.
-- An idea that demonstrates how mobility improves the lives of millions of people in emerging markets worldwide.
-- An idea that recognizes a good business opportunity can also contribute to "doing good" -- and making a dramatic difference in the lives of people in developing nations.

-- It must include a clear mission statement; and provide a product or service plan that will undeniably raise the standard of living, and/or enhance the lives of people living in emerging market countries today.
-- The initial target market must be located in a region with per capita income significantly lower than what is found in industrialized nations today (e.g., sub-$5 per day).
-- It must include a viable business model that has a high likelihood of providing a strong return on investment for the venture funding provided.

"We believe it is still early days in the Internet travel revolution. The increasing power of transparency, connectivity, and mobility will continue to open new worlds to travelers and new channels for suppliers. We believe that a small, passionate team of people can effect massive change."

Venture firms involved include General Catalyst Partners, Bellevue's Ignition Partners and Benchmark Capital, where Barton is a partner.

Cambridge, Mass.-based General Catalyst also backed travel search site Kayak.com, where Slyngstad is a director.

You'd think another travel company would create conflicts for Slyngstad at least, but maybe the Seattle venture isn't another way to sift through schedules and book trips. Kayak's chief executive told travel business site Tnooz that Slyngstad will remain on its board.

The job listing for its business development director says the job involves building revenue from Google Adwords, so maybe ads are going to be more important to the company than commissions.

I wonder if it's going to be some sort of social-sharing-community site for travelers, maybe a place to share travel videos, photos and messages from mobile devices?

Recommendation systems used by travel sites today are getting long in the tooth and don't take advantage of users' increasing connectivity, mobility and expectations of transparency created by YouTube and social media.

Wouldn't be it nice if you could zoom to a location and see a live discussion of current conditions at a hotel, with pictures and video, instead of wading through the old star reviews from anonymous travelers salted with posts by unscrupulous hotel managers?

Then it would be like Zillow and Glassdoor turned to travel, aggregating user-generated content to create a destination reference and referral site for people researching their next trip.

Here's a video of Franklin Page, the Swype employee who broke the Guiness World Record for text messaging on a touchscreen phone on March 5, showing his technique on a Samsung Omnia II.

A Norwegian holds the record for typing the same prescribed 160-character text message without a touchscreen phone. Sonja Kristiansen texted the message in 37.28 seconds at Oslo City Shopping Centre on Nov. 14, 2009.

The record for fastest typing on a smartphone is held by Pedro Matias of Portugal, who typed a prescribed 264-character text on a QWERTY mobile phone in 1 minute and 59.8 seconds during the LG Worldcup World Championship at Gotham Hall in New York on Jan. 14, according to Guiness.

Seattle lawyer rating and referral startup Avvo raised another $10 million to boost its growth.

The 35-person venture is verging on profitability with strong ad sales lately. But it opted to take the funding to grow more aggressively, Chief Executive Mark Britton said.

"To actually have revenue is something I think investors appreciate in this financing environment," he said.

DAG Ventures of Palo Alto, Calif., led the funding, with earlier Avvo backers Ignition Partners and Benchmark Capital contributing. Altogether the company has raised $23 million since it was conceived in 2006.

Britton said Avvo will use the proceeds for hiring and to expand its service. It lists ratings for 90 percent of U.S. lawyers and 50,000 of them actively participate in the site, including one out of three in Washington, he said.

"Ultimately we feel that there's such an opportunity in legal that now was the time to be more aggressive," he said.

It's a big day for Seattle-based Evri. The Paul Allen-funded "semantic Web" media company relaunched today with new visual features, and it acquired San Francisco-based Radar Networks.

Evri was especially interested in Radar's Twine.com, another semantic Web company with more social and sharing features that complement Evri, which automatically compiles streams of Web material related to a broad set of topics. Media companies have added Evri's widget to their sites, where it presents links to related information about a story.

Twine's 10 employees will move into Evri's San Francisco offices. Terms of the deal weren't disclosed. A spokesman said Evri, which has about 30 employees, isn't planning to move its headquarters to San Francisco.

Evri Chief Executive Will Hunsinger's comment in the release:

"Evri's and Radar Network's combined talent and complementary technologies bring the industry closer to delivering on the promise of a truly intelligent, timely and intuitive way of finding the news and content that matters most to people. With this acquisition, Evri takes a significant leap forward toward delivering on the consumer promise of semantic search technologies - more meaningful, relevant results filtered from the ever-growing and increasingly cluttered fire hose of content on the web."

Radar Chief Executive Nova Spivack will remain with the company in an advisory role.

A selling price wasn't disclosed, but Seattle venture firm Maveron said it had "a successful exit in the wellness sector," selling Kinetix Living to Regence BlueShield of Washington.

Seattle-based Kinetix provides health and nutrition programs and an online wellness community for companies and individuals. The company has 40 employees who will all stay with the company, a spokeswoman said.

"Maveron is pleased with the outcome for both its investors and the company and the employees who they believe will all be well served by the sale to Regence,'' Kim Hughes said via email.

Maveron, started by Starbucks Chairman Howard Schultz and Dan Levitan, has about $750 million invested in 22 portfolio companies.

I'm a little late writing about this, but I keep thinking about a blog entry that Seattle SEO guru Rand Fishkin posted a few days ago, analyzing the ROI on social media marketing.

Fishkin said the traffic and response from using Twitter, Facebook and other community sites is immediate and gratifying. But he warns that they can drain time and energy away from other online efforts with greater monetary payback.

His hypothesis is that most marketers engaging in social media aren't doing it because it produces greater return on investment "but because the metrics are more immediately tangible and emotionally rewarding."

Of course, Fishkin is in the business of supporting search engine marketers, but it's still a thoughtful take on the currently hyped phenomenon. An excerpt:

Social media engagement, whether it's building a name for yourself on Twitter, growing your connections on Facebook, increasing the number of followers on Digg or ratcheting up your popularity in a niche service or forum, produces some very compelling results. Changing some title tags, tweaking internal links or writing an article on a boring, business-relevant subject may bring more direct financial ROI per hour invested, but the metrics don't FEEL as emotionally rewarding.

Twitter generated 14,928 visits to his site during one period (compared with 666,642 from Google) that he shared to support his theory.

"That's huge, right?

Here's the problem... It's also the lowest converting traffic of any referral source -- less than half that of aggregate Google referrals.

I grant that direct referrals are never the whole story, and that there is real branding, marketing and user acquisition value to the traffic, participation and effort spent in social media. What I worry about is whether these intangibles are worth the expenditure."

Seattle's MOD Systems -- which makes retail kiosks for downloading movies and music -- today added a few notable local tech veterans to its board.

Will Poole, the former Windows Client boss at Microsoft, and Dan Gerrity, a co-founder and former CEO of Coinstar, will help guide MOD as it rolls out its entertainment delivery system.

"Both Will and Dan have unmatched experience in our target industries, and in organizational development and leadership. Both have built organizations from development stage to global success, and their skills, styles and guidance are welcome additions to our board. We're fortunate to have them join us," MOD Chairman and CEO Anthony Bay said in the release.

Poole is now co-chairman of virtual computing company NComputing, and Gerrity is vice president of business development at Intellectual Ventures.

MOD said board member Kyleen Cane, a Nevada securities lawyer, is stepping down after 18 months.

A former Microsoft engineer's longtime vision for a user-centered Web service is launching today at Strings.com.

Strings creates "personalized activity streams" by tracking users' Web activity so they can share and organize their online media consumption. A key difference with similar services is that Strings isn't advertising funded and won't disclose user activity to advertisers, the company said.

Founder Edward Balassanian left Microsoft in 1995 to start BeComm, a predecessor company focused on digital media. A year ago he restarted the self-funded venture in earnest and now employs 15 people working on Strings.

"The whole premise was the Web is so noisy," he said. "The best way to filter all the noise is for some automated system to understand 'me' intimately."

The service is free to end-users. Strings will make money from product purchases made through the site and later may monetize the service by helping commerce sites tailor product recommendations.

Balassanian hopes to have 100,000 Strings users within a year, and plans to open up the service for application developers to build upon.

(But first he'll have to beef up the site, which was overwhelmed by traffic on its debut ...)

-- Seattle search engine optimization company SEOmoz is backing out of the consulting business so it can focus on developing software for online marketers. SEOmoz passed its $1 million yearly consulting business to British SEO firm Distilled, which is setting up a Seattle office.

The move takes a load off SEOmoz founder Rand Fishkin and clears up any awkwardness caused by SEOmoz's selling software and services to SEO consultants, while doing consulting itself.

Fishkin said in his blog that his company is preparing to release several new tools and a new software platform this summer.

-- BlueKai, a Seattle firm that provides online advertising data to marketers and publishers, raised $21 million in its third funding round from GGV Capital, plus previous investors Redpoint Ventures and Battery Ventures. Its previous two rounds raised a total of $13.7 million.

BlueKai described itself in the release as "the online industry's largest intent-focused, auction-based data exchange."

-- Their moves were perhaps overshadowed by a NSFW blog rant by Silicon Valley startup investor and adviser Dave McClure.

He's the latest pundit to point out that the companies drank too much Google Kool-Aid and spent too much time chasing eyeballs and clicks over the last decade and it's time for them to build businesses based on selling subscriptions.

A few excerpts:

Everyone seems to have assumed that since Yahoo and Google were giants in internet advertising, therefore all internet startups should be using some form of CPM or CPC ad-monetization.

THIS IS A VERY LARGE LEMMING-LIKE ERROR IN LOGIC THAT MUST BE CORRECTED IMMEDIATELY.

We have largely WASTED an entire web decade of time, energy & venture capital on extremely inefficient revenue models.

On subscriptions:

ASSERTION #2: The default startup business model for 2010 & beyond will be subscriptions and transactions (e-commerce, digital goods).

Newsflash folks: The Internet does NOT want to be FREE... It wants to GET PAID on F**** Friday, just like everybody else on the damn planet.

More:

Free is not Forever, unless you never want to be in control of your own fate.

Gradually we are discovering that the default revenue model on the internet should probably be the simplest one -- that is: basic transactions for physical or digital goods, and recurring transactions (aka subscriptions) for repeat usage.

Let me say that one more time so you don't miss it.

Get Dem Bitches to *PAY* You, G.

(Can someone get McClure to speak at the next newspaper industry convention?)

Bellevue enterprise business-intelligence company Atigeo announced a few notable hires today, including Microsoft Windows VP Jawad Khaki, who is now Atigeo's chief technology officer and executive vice president of engineering.

Ken Myer, the outgoing director of the Washington Technology Industry Association, said the tech trade group should find a replacement within 60 days.

Myer, 52, announced Monday that he's resigning after three years as WTIA president and chief executive so he can return to the tech industry. He previously worked at startups, IBM and ActiveVoice, where he was an executive vice president handling marketing, sales, customer service and technical support.

He's staying with WTIA through March, to help with the executive search and transition. Meanwhile, he hasn't even started looking for a new job, though he said he's especially interested in cleantech and cloud computing.

"Right now I want to make sure there's a good transition, that I help the board after they've found a new leader to help them transition them on and then I'll return to industry," he said.

Myer oversaw WTIA's expansion beyond software companies to include tech companies in general. It grew again in September by merging with the regional TechAmerica electronics industry trade group.

"I've gotten a lot of really nice messages of support and I feel really fortunate I made so many great relationships in this job," he said.

Cloudvox barely had time to get the kinks out of the telephony platform it launched in October, giving Web developers a simple way to add phone calling features to their applications.

The Seattle startup announced today that it was sold to Ifbyphone Inc., a Chicago "cloud telephony" provider.

"By acquiring Cloudvox, we're sending a message to businesses of every size: If you're interested in using telephone applications to automate sales, marketing, business processes, and Web applications, we're the place to start," Ifbyphone Chief Executive Irv Shapiro said in the release.

Terms of the sale weren't disclosed.

Cloudvox was started by Loudeye veterans Troy Davis and Eric Lindvall; Lindvall also worked at Consera and Therion.

Cloudvox will continue to have its office in Seattle - where it employs two people plus contractors - and its service will be called Cloudvox Powered by Ifbyphone, a spokeswoman said.

Bellevue social media monitoring service Visible Technologies raised $22 million in its third funding round, money it will use to expand internationally and build up its technology platform, the company announced today.

The round was led by Investor Growth Capital, a unit of Stockholm, Sweden-based Investor AB. Previous investors WPP, Centurion Holdings, Ignition Partners and In-Q-Tel also participated.

Visible's service is used by large companies such as Microsoft, political groups, billionaires and advertising agencies to monitor and manage the online reputation of products, brands and individuals. It was started in 2003 in a Kirkland apartment.

"This funding allows us to accelerate our growth path to continue meeting the demands of global customers and help them drive real business results through successful online consumer engagement," CEO Dan Vetras said in the release.

Visible simultaneously announced that Kelly Pennock, former president of Analytics and the BI Business Unit of First Data, was hired as its new chief technology officer, and Attenex and PeopleSoft veteran Elizabeth Morgan was hired as senior vice president of products and services.

Three years after they cooked up a business plan over a kitchen table, Kabir Shahani and Chris Hahn landed $3.5 million for Appature, their Seattle venture providing online software and services to healthcare marketers.

The profitable company today announced it raised the money in its first round of venture financing, from Ignition Partners and Madrona Venture Group. It will use the money for sales and marketing and product development.

"Our investors are providing us with the support and infrastructure to get our solution in the hands of more organizations that could benefit from it, and that's what makes this partnership very exciting," Shahani said in the release.

Ignition's Richard Fade said in the release that it's "rare to find a company that has built a profitable enterprise without seed capital, let alone one that has acquired the quality of customers Appature serves."

Bellevue game startup Smith & Tinker is laying off about 30 percent of its employees barely a month after stores began selling a handheld player for "Nanovor," its sci-fi trading card game aimed at preteen boys.

The company now employs about 40 people after laying off 10 to 15, according to Joe Lawandus, president and co-founder.

"Largely it was right-sizing the organization as we've gotten the game out,'' he said, explaining that the company's trying to "maintain as much of our cash as possible."

The company is still hiring for a few different positions on its development team. It's now working on improving the game, versions for the iPhone and iPod Touch and additional games on the platform, which blends online and offline play.

"We're still full steam ahead," he said.

The two-year-old company started initially by former Xbox creative director Jordan Weisman has $29 million in funding from Paul Allen and other investors.

A spokeswoman provided the following statement:

Smith & Tinker can confirm that unfortunately company layoffs were conducted this week. As many startups do, we staffed aggressively early on to meet deadlines for launching our product online and at retail this year. These layoffs are needed to bring our organization to a healthy operational size for the remainder of this year and 2010. Nanovor has been recognized by FunFare and Dr. Toy as a hot toy for 2009 and has seen strong consumer adoption to date; the company continues to receive solid support from our board. Employees leaving the company will receive severance packages.

Recently there's been discounting of the Nanovor device. It was originally going to sell for $50 but it's been available lately for $39.

The Washington Technology Industry Association held its annual predictions dinner tonight at the Grand Hyatt in Seattle, with a group of tech entrepreneurs and investors sharing a few thoughts on what may happen in 2010.

Kelman: Charge for search. "In general, I think that Twitter is overvalued. I think people are paying too much attention to Twitter and not enough to Facebook."

Sack: Twitter's going to make more money than Facebook in 2010. "It is a promotional vehicle. ... I think the potential to make more revenue dollars is with Twitter."

Bryant: "Twitter's not mainstream and the traffic numbers suggest it's not going to be."

Gottesman: "I'm not sure how much money they can make but my sense is there's a lot of buyers out there who have a perception they could do a lot more than Twitter" than twitter itself as a relatively small startup.

Smith: "Twitter's going to sell a bill of goods to a buyer with deep pockets ... it's going to be absorbed by a big company" and "go nowhere."

Google's stock price at the end of 2010?

Sack: $701.

Smith: $720. The Google phone "is going to go crazy."

Gottesman: About where it is now (around $577).

Kelman: $650, driven by enterprise products.

Bryant: $500. "To me Google is still a one-trick pony."

Where will Microsoft's stock be at the end of 2010 and will Ballmer still be CEO then?

Sack: $31.75, Ballmer stays.

Kelman: $32, Ballmer stays.

Gottesman: About where it is today after a Windows 7 run-up. Ballmer stays.

Smith: $40. "Windows 7 is a giant step forward for them."

Bryant: It will at least touch $40. Win7 Mobile, Azure and desktop factors.

Amazon.com is at around $130. Where will it be?

Sack: I think AMZN is a juggernaut. $155-160.

Kelman: I'd second that. I think it's the most entrenched brand on the Internet.

Gottesman: Around where it is today - the market feels rich to me now.

Smith: Probably $150.

Bryant: $152, after buying Netflix, Blockbuster and Hulu.

Mergers and acquisitions happening around here in 2010?

Gottesman: Microsoft buys RIM, Cisco buys F5.

Sack: Picnik will get purchased by Adobe, Icanhascheezburger will be bought by Rupert Murdoch's News Corp.

Smith: Adobe adds analytics.

Bryant: Every mid-size technology company ... will likely be acquired in the next few years.

When will Chinese companies start gobbling up U.S. technology companies?

Smith: I don't think it's going to be a factor in 2010.

Gottesman: I don't know if it will be 2010 but in the next couple of years they'll be a force to reckon with.

Bryant: Domestic markets are so robust in China you don't have to look outside the borders for growth opportunities.

What is going to be the dominant cloud architecture in 2010 and going forward?

Gottesman: Next year, Amazon.

Kelman: I think Google's going to deploy more resources than Amazon.

Smith: It's going to be Google on price, Amazon on features and flexibility and Microsoft's always going to be more interesting for people deploying on Windows infrastructure.

What sort of startup would you invest $2 million in during 2010?

Smith: I would start a fun, online site that basically is a music creation service in the cloud - pro-tools in the cloud for consumers.

Sack: Put it in Founders Co-op and invest in three or four - $2 million today is too much to start a company with. I like P.R. 2.0, lead-generation companies and healthcare.

Gottesman: Location-based entertainment - experiences you can have in the physical world but with your mobile phone.

Kelman: I'd start a newspaper. I think more people are reading more than ever before. In 10 years, 20 years, 50 years .... every community is going to need it's own authoritative voice, people will pay for that authoritative voice.

Smith: It's not going to happen anytime soon in terms of the process being easy. For the forseeable future you're going to have to work hard to make stripped down duplicatory experiences for the mobile phone.

Kelman: Developers want to work on mobile apps. They're going to do cool things and then the money's going to follow.

What's going to happen with power meter graphing services from Microsoft and Google?

Gottesman: I think there's an opportunity there.

Sack: The price of oil has to go back up.

Kelman: I worry about green tech being emphasized more in Silicon Valley than Seattle. No one has really been interested in green tech here.

Gottesman: There is some cool stuff going on at the University of Washington.

Big, bold prediction for 2010?

Kelman: There's an enormous amount of pressure from investors on startups to sell, not to build them.

Gottesman: It depends on who you're talking to.

Smith: Venture capital market's concept of "our business is built on big hits" will change to "our business is built on base hits."

The ghosts will be partying tonight at The Last Supper Club in Seattle, where a reunion for dot-com veterans begins at 6 p.m.

More than 100 people from the era that spawned Kozmo.com, MyLackey.com and HomeGrocer, among others, are registered, according to organizers of the event, co-host Dakotta Alex, who used to work at Kozmo and HomeGrocer.

Citing unnamed sources, the tech blog said Disney's Steamboat Ventures is putting $40 million more into Ontela to enable the $60 million "fire sale" of Photobucket:

"Lots more details are coming in on the Photobucket fire sale by MySpace/News Corp. The sale is all but complete, say new sources. And the buyer is definitely Washington state based Ontela."

Ontela founder Dan Shapiro wouldn't comment on or off the record when reached on his mobile this afternoon. He sounded upbeat, but he usually does, so who knows?

The deal would dramatically raise the profile of Ontela, which has been steadily building a business providing photo handling technology to mobile phone companies.

It would also further boost Disney's stake in the Seattle tech industry. I wonder if Ontelabucket would use Disney Internet Group's Seattle-based infrastructure.

Seattle provided other chess pieces that News Corp has moved recently. It phased out MySpace founders with Seattle pedigree after buying local music startup iLike, and last week promoted its founders to executive positions in the social networking company.

Big companies like Qualcomm and Dell aren't the only ones being highlighted at the Future in Review Conference taking place today at the Seattle Four Seasons Hotel.

FiRe -- the creation of Friday Harbor tech pundit, investor and consultant Mark Anderson -- also presented a handful of small companies with potentially far-reaching innovations.

The eight "FiReStars" billed as changing the world include:

Seattle's Twisted Pair Solutions, which developed technology for connecting various types of radios into a unified communication network. Chief Executive Tom Guthrie described how it helped 48 different agencies in six counties on the Olympic Peninsula have their radios interoperate.

Skyfiber, a Bryan,, Texas-based venture, is using lasers to transmit broadband capacity at up to 1.25 gigabytes per second. Using lasers to handle broadband isn't new technology, but Skyfiber "reduces cost to the point you can actually start widespread use of this technology in an effectual way," President David Achim said.

Serious Materials, a Sunnyvale, Calif. startup with $120 million in funding, is producing green building materials including efficient windows and drywall that's mold- and termite-resistant and generates less dust. Chief Executive Kevin Surace said 12 percent of the world's energy is used to produce bulding materials with largely antiquated technology.

Yet companies such as Serious Materials can't change the multi-billion building products industry by pitching green products. There's a limited market specifically interested in those materials, while the broader market has to be won over by offering more value.

"If you're going to build it you've got to go after the masses. If you're going to go after the masses, you've got to bring real value," he said.

Tesla, the Silicon Valley manufacturer of electric cars, was represented by John Walker, vice president of North American sales. Asked when the company will make models more affordable than its current $100,000 roadster, Walker said the company's (roughly) $50,000 Model S sedan should be on sale in 2 1/2 to 3 years.

Santa Barbara-based CytomX Therapeutics set out to "reinvent the antibody," said Chief Executive Nancy Stagliano.

The company is combining knowledge about drugs such as cancer with drug engineering approaches to make antibodies safer. The products, which are undergoing animal testing for use on cancers, may allow physicians to safely administer higher doses of medicine.

"If they're not limited by toxicity ... the amount of the drug they can give will be much higher," she explained, adding that "we think this is a big idea and a broad play."

Hoana Medical of Honolulu presented a sensor-equipped coverlet that transforms beds at hospitals into "LifeBeds" that track vital signs without anything connected to the patient. They also notify care providers of status and can "speak" to patients who try to get out of bed when they shouldn't.

"Effectively we connect every bed to the Internet," said Patrick Sullivan, chief executive.

InTouch Health of Santa Barbara produces robots that doctors use to remotely check on patients and administer care, providing "remote presence telemedicine." This is especially useful with stroke victims, who need to be seen by specialists within three hours of an incident, explained Chief Executive Yulun Wang. He demonstrated using a laptop in Seattle connected to a robot in Santa Barbara, that unplugged itself, wheeled over to a patient and zoomed in on its pupils and display of vital signs.

"What we do with our robotics is project the physician there," he said.

Gadgets and games | Fun stuff I've written about lately includes Apple's iPhone, Hewlett-Packard's HDX laptop and Microsoft's Halo3. Also on the radar are new digital video boxes such as the Tivo HD and the Vudu.